Berkeley Eng Regulatory News (BKY)

Drill Type

Pre-2007

2007-2008

2013-2014

Total

Holes

Metres

Holes

Metres

Holes

Metres

Holes

Metres

%

Reverse Circulation

-

-

66

3,579

63

4,051

129

7,630

60

Diamond Core

72

4,024

9

661

5

391

86

5,076

40

Total

72

4,024

75

4,240

68

4,442

215

12,706

100

Zona 7 - Inferred Mineral Resource Estimate as at 25 November 2014

Reported at a lower cut-off grade of 200 ppm U3O8

Domain

Tonnage

(million tonnes)

Grade

(U3O8 ppm)

Contained U3O8

(million pounds)

2 / 3 / 4 / 5

5.1

318

3.6

6

18.1

665

26.6

Total Inferred

23.2

589

30.1

Zona 7 - Inferred Mineral Resource Estimate as at 25 November 2014

Lower Cut-off Grade

(U3O8 ppm)

Tonnage

(million tonnes)

Grade

(U3O8 ppm)

Contained U3O8

(million pounds)

100

35.7

434

34.2

200

23.2

589

30.1

300

15.7

754

26.1

400

11.9

882

23.2

500

9.4

1,001

20.7

Zona 7 - Comparison between June 2012 MRE and November 2014 MRE (200 ppm U3O8 cut-off grade)

Category

Tonnage

(million tonnes)

Grade

(U3O8 ppm)

Contained U3O8

(million pounds)

Jun-12

Nov-14

Difference

Jun-12

Nov-14

 Difference

Jun-12

Nov-14

Difference

Inferred

3.9

23.2

495%

414

589

42%

3.6

30.1

745%

Sampling techniques

Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.

Berkeley DD core was sampled using 0.25-1.85m intervals in the mineralised zones, including areas of internal low grade or waste. In addition, the sampling was extended 3-5m up and down hole from the interpreted mineralised zone. Half or quarter core was used for sampling.

Berkeley reverse circulation (RC) drill samples are collected over 1m intervals and split on site using two riffle splitters in cascade to provide an approximately 3-5kg sample. In rare cases, wet samples are split using a cone and quarter method. Field tests show that both methods produce representative samples.

Junta de Energía Nuclear (JEN) diamond drill (DD) core was sampled using 0.25m, 0.50m and 1.00m intervals in the mineralised zones, with 0.25m intervals being the most frequent sample length.

Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

Berkeley sampling protocols include the insertion of standards and blanks into the sample stream to assess the accuracy, precision and methodology of the external laboratories used. In addition, field duplicate samples are inserted to assess the variability of the uranium mineralisation. Approximately 15-20% of all samples relate to quality control. In addition, the laboratories undertake their own duplicate sampling as part of their internal Quality Assurance/Quality Control (QA/QC) processes. Examination of the QA/QC sample data indicates satisfactory performance of field sampling protocols and assay laboratories providing acceptable levels of precision and accuracy.

Berkeley drill hole collar locations were surveyed by qualified surveyors (Cubica Ingeniería Metrica S.L.) using standard differential global positioning system (DGPS) equipment achieving sub decimetre accuracy in horizontal and vertical position. Down-hole surveys were undertaken using a Geovista down-hole deviation probe. Measurements are taken every 1cm down hole and averaged every 10m. No strongly magnetic rocks are present within the deposit which may affect magnetic based readings.

Berkeley uses two down-hole gamma probes to provide eU3O8 ("equivalent" U3O8 grade and e-grade) data. The probes were originally calibrated by the manufacturer (Geovista, UK) and are currently sent, on an annual basis, to Borehole Wireline Pty Ltd in South Australia for their recalibration in their test pits. Calibration includes the determination of k-factor, deadtime, bore hole diameter and fluid corrections, which are reported in the "Primary Probe Calibration" document. All parameters are then applied during the in-house e-grade calculation process.

JEN sampled whole core using 0.25m, 0.50m and 1.00m interval lengths. QA/QC protocols used are unknown.

Aspects of the determination of mineralisation that are Material to the Public Report. In cases where 'industry standard' work has been done this would be relatively simple (eg 'reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay'). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.

Berkeley RC drill samples are collected over 1m intervals and split on site using cone and quarter method (2008 and 2013 campaigns) or two riffle splitters in cascade (2014 campaign) to provide an approximate 3-5kg sample.

Scintillometer measurements were taken on all Berkeley RC samples and this data was then used to select the samples to be sent to external laboratories for sample preparation and analysis. Indicative mineralised intervals were determined from this data and the sampling extended up and down hole by at least 2-5m.

Samples were further split in the core shed using a riffle splitter such that 0.7-1kg samples were sent to ALS laboratories for preparation (Seville, Spain) and analysis (Loughrea, Ireland and Vancouver, Canada). Samples were dried, fine crushed down to 70% below 2mm, split to obtain 250g and pulverised with at least 85% of the sample passing 75µm. 10g of sample was used for uranium analysis by the pressed powder X-ray fluorescence (XRF) method (2013 and 2014 drilling campaigns).

Samples from the 2007 and 2008 drilling campaigns were sent to Actlabs Canada for uranium analysis by the Delayed Neutron Counting (DNC) method.

JEN core samples were prepared in internal company laboratories and assayed for uranium using XRF, Atomic absorption spectroscopy (AAS) or fluorometric methods.

Drilling techniques

Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc).

Berkeley drilling comprised both DD (HQ) and RC drilling using a 140mm diameter face sampling hammer.

For angled DD oriented core was achieved using DeviCore measurements (2014).

The historical JEN drilling, which accounts for approximately 30% of the total drilling, was used DD (NQ).

Drill sample recovery

Method of recording and assessing core and chip sample recoveries and results assessed.

Berkeley and JEN DD typically recorded overall core recoveries in excess of 90%, which is considered acceptable.

Berkeley RC drill samples are collected over 1m intervals through a cyclone. Plastic sample bags are strapped to the cyclone to maximise sample recovery. Individual sample bags were not weighed to assess sample recovery but a visual inspection was made by the Company geologist to ensure all samples are of approximately equivalent size.

Measures taken to maximise sample recovery and ensure representative nature of the samples.

The DD drilling rigs used face discharge bits to ensure a low contact between the rock and drilling fluids, minimising ore washing. Core was cut using a water saw with care taken to ensure minimal ore loss.

The RC drilling rigs utilised suitably sized compressors to ensure dry samples where possible. Plastic sample bags were strapped to the cyclone to maximise sample recovery. Sample logs record whether the sample was dry, moist or wet.

Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.

Due to the solubility and mobility of the uranium minerals the use of water in core recovery in DD is controlled.

The core and RC sample recoveries are of an acceptable level and no bias is expected from any sample losses.

Logging

Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.

Berkeley geological logging of DD core included recording descriptions of lithology, age, colour, oxidation, mineralisation, alteration, weathering, structures, textures, grain size and mineralogy.

Berkeley geotechnical logging of DD core included recording descriptions of integrity (recovery and RQD), materials (lithology, rock strength and depth oxide staining), structures (type, angle, contact type, infill, weathering)

Berkeley structural logging of DD core included recording descriptions of structure type, structural angles, contact type, infill, line type and slip direction.

Berkeley alteration logging of DD core included recording descriptions of metamorphic textures, alteration mineralogy and mineralisation style.

Berkeley geological logging of RC chip samples included recording descriptions of lithology, weathering, alteration and mineralisation. A scintillometer reading of counts per second (cps) was recorded for each 1m sample (quantitative).

JEN geological logging of DD core included recording descriptions of lithology, iron oxides, sulphides, uranium mineralogy, fracturing and no recovery zones.

Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.

Geological logging is qualitative in nature.

Berkeley DD core boxes and samples and RC samples and chip trays were photographed.

JEN did not take photographs of drill core.

The total length and percentage of the relevant intersections logged.

All DD and RC drill holes were logged in full by geologists employed by the Companies.

Sub-sampling techniques and sample preparation

If core, whether cut or sawn and whether quarter, half or all core taken.

Berkeley DD core was sampled using 0.25-1.85m intervals in the mineralised zones, including areas of internal low grade or waste. In addition, the sampling was extended 3-5m up and down hole from the interpreted mineralised zone. Half or quarter core was used for sampling.

JEN DD core was sampled using 0.25m, 0.50m and 1.00m intervals in the mineralised zones, with 0.25m intervals being the most frequent sample length. Whole core was used for sampling.

If non-core, whether riffled, tube sampled, rotary split, etc. and whether sampled wet or dry.

Berkeley RC drill samples were collected at 1m intervals. RC intervals were sampled by splitting dry samples in the field to 3-5kg using cone and quarter method (2008 and 2013 campaigns) or two riffle splitters in cascade (2014 campaign) and further split in the core shed to 0.7-1kg using a riffle splitter. Where samples were wet they were dried prior to spitting. In rare cases, wet samples were split using a cone and quarter method.

For all sample types, the nature, quality and appropriateness of the sample preparation technique.

Berkeley samples (2013 and 2014 drilling campaigns) were sent to ALS laboratories for preparation and analysis. Samples were dried, fine crushed down to 70% below 2mm, split to obtain 250g and pulverised with at least 85% of the sample passing 75µm. 10g of sample was used for uranium analysis by pressed powder XRF method. Samples from the 2007 and 2008 drilling campaigns were sent to Actlabs Canada for uranium analysis by the DNC method. These methods are considered appropriate for this style of uranium mineralisation.

JEN core samples were prepared and assayed for uranium at internal company laboratories using XRF, AAS or fluorometric methods.

Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.

Previous Berkeley's field tests determined that the sample size and method of sampling produce representative RC samples. QA/QC procedures involved the use of standards and blanks which were inserted into sample batches at a frequency of approximately 15%.

Quality control procedures used by JEN are unknown.

Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.

Duplicate splits of RC samples were taken every 10m down hole within the sampled intervals by Berkeley. The results from these duplicates generally show acceptable repeatability, however indications of inhomogeneity were observed in a number of duplicates.

Whether sample sizes are appropriate to the grain size of the material being sampled.

The uranium is typically very fine grained. Previous test work carried out by Berkeley using different sample sizes demonstrated that the selected sample size is appropriate.

Quality of assay data and laboratory tests

The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

Berkeley assayed samples for uranium using the DNC method during the 2007 and 2008 drilling campaigns and pressed powder XRF during the 2013 and 2014 drilling campaigns. These analytical methods report total uranium content.

JEN assayed samples for uranium were completed at internal company laboratories using XRF, AAS or fluorometric methods. No QA/QC data is available for this historical data.

For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.

Down-hole gamma logging was undertaken for all probe accessible holes drilled by Berkeley to provide eU3O8 data. The down-hole gamma response was converted eU3O8 by correcting for radon, hole diameter, air/water and a deconvolution filter was also applied. eU3O8 data was only considered in the mineral resource estimation process when chemical assay data was not available.

Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.

Standards, blanks and duplicates were regularly inserted into the sample stream by Berkeley, with approximately 15-20% of all samples related to quality control. The external laboratories used also maintain their own process of QA/QC utilising standards, repeats and duplicates.

Review of the Berkeley quality control samples, as well as the external laboratory quality QA/QC reports, has shown no sample preparation issues, acceptable levels of accuracy and precision and no bias in the analytical datasets.

JEN used internal company laboratories. No QA/QC data is available for this historic data.

Verification of sampling and assaying

The verification of significant intersections by either independent or alternative company personnel.

Reported significant intersections were checked and verified by Senior Geological management.

The use of twinned holes.

No twinned holes were drilled for the current mineral resource estimation process.

Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.

All primary data was recorded in templates designed by Berkeley. Assay data from the external laboratory is received in spreadsheets and downloaded directly into an Access Database managed by the Company. Data is entered into controlled excel templates for validation. The validated data is then loaded into a password secured relational database by a designated Company geologist. Daily backups of all digital data are undertaken. These procedures are documented in the Berkeley Technical Procedures and Protocols manual.

JEN primary paper data was digitalized and recoded following the Berkeley protocols. The validated data was then loaded into a password secured relational database by a designated Company geologist.

Discuss any adjustment to assay data.

Uranium (ppm) assays received from the external laboratory were converted to U3O8 (ppm) using the stoichiometric factor of 1.179.

Location of data points

Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.

Berkeley drill hole collar locations were surveyed by qualified surveyors (Cubica Ingeniería Metrica S.L) using standard DGPS equipment achieving sub decimetre accuracy in horizontal and vertical position.

Berkeley down-hole surveys were undertaken using a Geovista down-hole deviation probe. Measurements were taken every 1cm down hole and averaged every 10m. No strongly magnetic rocks are present within the deposit which may affect magnetic based readings.

JEN holes were drilled on grid coordinates and were not surveyed after drilling.

Specification of the grid system used.

The grid system is UTM ED1950 Zone 29N.

Quality and adequacy of topographic control.

Topographic control was based on a digital terrain model with sub metric accuracy sourced from the Spanish Geographical Institute (Instituto Geográfico Nacional) and was verified through detailed drill hole collar surveys by a qualified surveyor using a DGPS.

Data spacing and distribution

Data spacing for reporting of Exploration Results.

The majority of the Berkeley drilling was undertaken on a notional 100m by 100m grid, with section lines orientated approximately perpendicular to the interpreted strike of the mineralisation.

The historical JEN drilling was completed on a closer spaced 35m by 35m grid within the previous resource area.

Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.

The data spacing (notionally 100m by 100m) is considered sufficient to imply but not verify geological and grade continuity, and allow the estimation of Inferred Mineral Resources.

Whether sample compositing has been applied.

No compositing of RC samples in the field has been undertaken.

Orientation of data in relation to geological structure

Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.

The mineralised zone is a 2-3km scale fold structure with the dominant strike direction being NNE-SSW. Despite the general dip of the host geological units and structures ranging from 50-80°, the mineralised zone is interpreted to be sub-horizontal (due to post mineralisation supergene processes) to shallowly dipping.

If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.

The majority of DD and RC drill holes are vertical. Due to the interpreted flat lying nature of the mineralisation, no sampling bias is considered to have been introduced by the orientation of the drilling.

Sample security

The measures taken to ensure sample security.

Chain of custody is managed by Berkeley. Samples were transported from the drill site by Company vehicle to a sample preparation shed where samples were prepared for dispatch. Samples were sent directly from the sample preparation shed to the laboratory using a certified courier or a Berkeley owned vehicle authorised for radioactive materials transport. No other freight was transported with the samples which were taken directly from the Berkeley facility to the external laboratory. Sample submission forms were sent in paper form with the samples as well as electronically to the laboratory. Reconciliation of samples occurred prior to commencement of sample preparation for assaying.

The historical drilling samples were prepared and analysis using internal company laboratories. The chain of custody is unknown.

Audits or reviews

The results of any audits or reviews of sampling techniques and data.

Sampling techniques and procedures, as well as QA/QC data, are reviewed internally an ongoing basis. Malcolm Titley (CP, Geology Consultant, Maja Mining Limited) has independently reviewed the sampling techniques, procedures and data. He has undertaken a number of site visits to review and inspect the application of procedures. These reviews have concluded that the sampling and analytical results have resulted in data suitable for incorporation into Mineral Resource estimation.

Mineral tenement and land tenure status

Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.

The Zona 7 Prospect lies on the Alisos Investigation Permit PI 6605-20 which is 100% owned by Berkeley Minera España S.L, a wholly owned subsidiary of Berkeley Resources Limited.

The Alisos Investigation Permit is currently in the first year of its second three year term and will expire on 4 January 2017.

No historical sites or national parks are located within the Permit. The Zona 7 Prospect is located adjacent to the village of Villavieja de Yeltes.

The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

Tenure in the form of an Investigation Permit has been granted and is considered secure. There are no known impediments to obtaining a licence to operate in this area.

Exploration done by other parties

Acknowledgment and appraisal of exploration by other parties.

Previous exploration at Zona 7 was completed initially by Junta de Energía Nuclear (JEN) and then Empresa Nacional de Uranio S.A. (ENUSA), both Spanish state run companies, from the late 1950's through to the mid 1980's. Work completed by JEN and ENUSA included mapping, radiometric surveys, trenching and diamond and open-hole drilling.

A detailed data assessment and verification of the historical data supplied by JEN and ENUSA has been undertaken by Berkeley. No significant issues with the data were detected.

Geology

Deposit type, geological setting and style of mineralisation.

The uranium mineralisation is hosted within Ordovician metasediments adjacent to granite. The mineralisation typically occurs as a sub-horizontal to shallowly dipping layer occurring between surface and 100m depth. The style of the uranium mineralisation includes veins, stockwork and disseminated mineralisation in joint/fracture filling associated with brittle deformation. Uraninite and coffinite are the primary uranium minerals. Secondary uranium mineralisation is developed in "supergene-like" tabular zones corresponding to the depth of weathering. Most of the mineralisation is hosted within partially weathered and unweathered metasediment. This deposit falls into the category defined by the International Atomic Energy Association (IAEA) as Vein Type, Sub Type Iberian Type.

Drill hole Information

A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes:

o easting and northing of the drill hole collar

o elevation or RL (Reduced Level - elevation above sea level in metres) of the drill hole collar

o dip and azimuth of the hole

o down hole length and interception depth

o hole length.

No new exploration results are included in this release.

If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.

All Berkeley drill holes within the resource area have previously been reported in releases to the ASX providing collar easting, northing, elevation, dip, azimuth and length of hole and mineralised intercepts as encountered.

Data aggregation methods

In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated.

No new exploration results are included in this release. All Berkeley drill holes within the resource area have previously been reported.

Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.

No new exploration results are included in this release. All Berkeley drill holes within the resource area have previously been reported.

The assumptions used for any reporting of metal equivalent values should be clearly stated.

No metal equivalent values were used.

Relationship between mineralisation widths and intercept lengths

These relationships are particularly important in the reporting of Exploration Results. If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.

All drilling was planned in such a way as to intersect expected mineralisation in a perpendicular manner. The uranium mineralisation is interpreted to be flat lying to shallowly dipping so all of the RC holes were drilled vertically. The previously reported (no new exploration results are included in this release) down-hole intervals were therefore interpreted to approximate true widths however, given the early stage nature of the work, confidence in the orientation of the mineralisation is low.

If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg 'down hole length, true width not known').

The previously reported (no new exploration results are included in this release) down-hole intervals were interpreted to approximate true widths however, given the early stage nature of the work, confidence in the orientation of the mineralisation is low.

Diagrams

Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.

Appropriate diagrams, including a drill plan and cross sections, are included in the main body of the ASX version of this release.

Balanced reporting

Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.

No new exploration results are included in this release. All Berkeley drill holes within the resource area have previously been reported.

Other substantive exploration data

Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples - size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

Down-hole gamma logging of all Berkeley holes was undertaken to provide eU3O8 data. Prior comparisons of eU3O8 data with chemical assay data have shown that on average eU3O8 tends to underestimate at higher grades (>500ppm) and overestimate at lower grades (3O8 data is not considered of sufficient quality to replace chemical assay data for the purposes of resource estimation. The Mineral Resources reported in this release are estimated using chemical assay data as the primary method for grade estimation in the resource modelling process and eU3O8 data is only used where there were no assay data available.

Further work

The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling).

Further work planned for the Zona 7 Prospect includes infill drilling that would be focused on improving geological confidence and resource classification.

The mineralisation remains open along the north-western margin and along strike, with both areas to be targeted in subsequent drilling campaigns

Geological studies will include detailed interpretation of lithology, structure and weathering and an assessment of potential relationships between these factors and uranium grade distribution.

Further work is also planned on a number of other exploration targets within the Retortillo Region.

Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

These are shown in the main body of the ASX version of this release.

Database integrity

Measures taken to ensure that data has not been corrupted by, for example, transcription or keying errors, between its initial collection and its use for Mineral Resource estimation purposes.

Drill hole data is stored in a password protected relational database (Access). Drill data recorded in a spreadsheet is transferred to the database by the project geologist who is responsible for reviewing and validating the data. Assay data is received from the external laboratories in digital format and is loaded directly into the database.

Geological logging is restricted to appropriate codes relevant to the local geology, mineralisation, weathering and alteration setting. A copy of the master database is linked to Surpac mining software for Mineral Resource Estimation (MRE).

Data validation procedures used.

Database validation checks including collar survey position, down hole survey control, assay limits, e-grade profiles, sample intervals and logging codes are completed prior to the data being transferred to the master database.

Site visits

Comment on any site visits undertaken by the Competent Person and the outcome of those visits.

Sampling techniques and procedures, as well as QA/QC data, are reviewed internally an ongoing basis. Malcolm Titley, (CP, Geology Consultant, Maja Mining Limited) has reviewed the sampling techniques, procedures, data and resource estimation methodology. He has undertaken a number of site visits, the latest being in September 2014, to review and inspect the application of these procedures. He concludes that the sampling and analytical results available are appropriate for estimation of the Mineral Resource.

If no site visits have been undertaken indicate why this is the case.

Site visits have been undertaken.

Geological interpretation

Confidence in (or conversely, the uncertainty of) the geological interpretation of the mineral deposit.

The confidence of the geological interpretation is appropriate for the current level of resource estimation. The resource is defined within mineralised envelopes which encompass all zones of significant mineralisation.

Nature of the data used and of any assumptions made.

Geology and mineralisation interpretation is based on geological logging and sample assays derived from RC and DD drilling, along with cross sectional interpretations which include surface mapping information and geophysical studies.

The effect, if any, of alternative interpretations on Mineral Resource estimation.

Structural studies show dips of structures vary between 50° and 80° however; the uranium mineralisation has undergone supergene remobilisation and is interpreted to be flat lying to shallowly dipping and generally within 100m from surface.

The use of geology in guiding and controlling Mineral Resource estimation.

On the deposit scale the uranium grade is controlled by both lithology and structure, while on a local scale the grade is interpreted to be influenced by supergene processes.

The factors affecting continuity both of grade and geology.

Geological logging and uranium assay of samples from drill holes has demonstrated the continuity of the grade and lithology between mineralised sections. Breaks in continuity are likely due to structural offsets, some of which have been observed or interpreted from surface mapping.

Dimensions

The extent and variability of the Mineral Resource expressed as length (along strike or otherwise), plan width, and depth below surface to the upper and lower limits of the Mineral Resource.

The Zona 7 uranium mineralisation covers an area of approximately 3.0km by 0.4km and generally occurs within 100m of surface.

Estimation and modelling techniques

The nature and appropriateness of the estimation technique(s) applied and key assumptions, including treatment of extreme grade values, domaining, interpolation parameters and maximum distance of extrapolation from data points. If a computer assisted estimation method was chosen include a description of computer software and parameters used.

A mineralised envelope at Zona 7 is created encompassing all zones of significant mineralisation. A number of different domains have been interpreted.

Geostatistical variogram modelling was used to determine appropriate parameters for estimation of uranium grade using Ordinary Kriging (OK).

Surpac software was used for mineralisation volume interpretation and uranium grade estimation.

Three sources of drillhole uranium grade data was used:

· Chemical U3O8 (ppm): 62%

· Radiometric Equivalent (ppm): 6%

· Background based on XRF and Gamma probe results (10 ppm U3O8): 32%

The drill hole spacing is nominally 100m by 100m, with some closer spacing at 50m by 50m or 35m by 35m.

Five mineralisation domains were identified (D2, D3, D4, D5 and D6). 1m samples were used to estimate grade into 25m by 25m by 6m parent blocks.

In order to reduce local bias due to extreme high grades, top cuts were applied:

· D2: 1,800ppmU3O8

· D3: none

· D4: 3,400ppmU3O8

· D5: 1,300ppmU3O8

· D6: 5,000ppmU3O8

Number of 1m samples required to make an estimate:

· Minimum samples = 6

· Maximum samples = 30

Search ellipse radii variable per domain in meters, along strike/ down-dip/across-strike:

· D2: 40/60/120

· D3: 55/80/160

· D4: 55/80/160

· D5: 95/140/280

· D6: 95/140/280

Search orientation variable per domain (dip, plunge, dip dir):

· D2: (130, 0, 0)

· D3: (165, 0, 0)

· D4: (50, 0, 0)

· D5: (40, 0, 0)

· D6: (25, 0, 0)

Search radii used for OK were increased by a factor of 2-2-1 and 4-3-2 (major-semi-major-minor) to estimate a grade for blocks not estimated in the 1st or 2nd pass respectively.

In-situ dry bulk densities were assigned based on zones of weathering intensity and used to estimate tonnage.

The availability of check estimates, previous estimates and/or mine production records and whether the Mineral Resource estimate takes appropriate account of such data.

The current resource estimate was compared with the previous resource estimate (February 2010) which was based on earlier drill campaigns (historical, 2007 and 2008) and to a polygonal estimation. Both of which support the current results.

No mining production has taken place at Zona 7.

The assumptions made regarding recovery of by-products.

The resource model only estimates uranium.

Estimation of deleterious elements or other non-grade variables of economic significance (eg sulphur for acid mine drainage characterisation).

At this stage, there are no deleterious elements or other non-grade variables identified as being of economic significance at Zona7.

In the case of block model interpolation, the block size in relation to the average sample spacing and the search employed.

The uranium grade is estimated into the 25m (X) by 25m (Y) by 6m (Z) blocks. This compares to the average drill spacing of 50-100m in X and Y and an assumed mining bench height of 6m. This block size was chosen to match the potential open cut mining methodology.

Any assumptions behind modelling of selective mining units.

Selective mining unit dimensions have not been considered in the current model.

Any assumptions about correlation between variables.

Uranium is the only economic metals estimated in the current resource model.

Description of how the geological interpretation was used to control the resource estimates.

Geological interpretation controlled the volume of the resource estimate by restricting the interpretation of the mineralisation volume and associated samples to material with continuity above a 100 ppm U3O8 grade.

The domains are based on geology, structure and uranium grade with defined zones of mineralisation that show continuity along and across strike.

A further division of the model into completely weathered, partially weathered and fresh rock is applied by triangulated surfaces interpreted from the logging of the drill samples. This division is only applied for density purposes.

Discussion of basis for using or not using grade cutting or capping.

Uranium grade distribution exhibits a strong positive skewness, so a top cut was applied to reduce local bias by extreme grades outliers - nominally approximating the 97.5 population percentile. The domains were assessed independently and a top cut grade was determined for each domain.

The process of validation, the checking process used, the comparison of model data to drill hole data, and use of reconciliation data if available.

Validation of the MRE included visual inspection of the grade distribution compared to the drill data, comparison of block model statistics to the sample statistics and generation of swath plots. These confirmed that the MRE appropriately represents the grade and tonnage distribution of the uranium mineralisation at the confidence levels reported.

Moisture

Whether the tonnages are estimated on a dry basis or with natural moisture, and the method of determination of the moisture content.

The resource tonnage is reported on a dry bulk density basis. In-situ dry bulk density measurements were completed on dry core and sample grades are reported using dry weight. No moisture content of drill core has been determined.

Cut-off parameters

The basis of the adopted cut-off grade(s) or quality parameters applied.

The MRE has been reported using a 200ppm U3O8 cut-off grade. Recent feasibility studies on adjacent properties have demonstrated that a 100ppm U3O8 cut-off is economic. Based on the current uranium market, reporting of the MRE at a 200 ppm cut-off grade is both justifiable and consistent with previous published MRE's for this style of mineralisation.

Mining factors or assumptions

Assumptions made regarding possible mining methods, minimum mining dimensions and internal (or, if applicable, external) mining dilution. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential mining methods, but the assumptions made regarding mining methods and parameters when estimating Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the mining assumptions made.

The resource can potentially be extracted using open pit mining methods, with the recovery of uranium through the application of acid heap leach methods.

Indicative parameters used for pit optimisation purposes in recent feasibility studies on adjacent properties are:

Uranium selling price: US$65/lb U3O8,

Total Mining Cost: US$7.5/lb U3O8

Mining recovery: 97.5%

Mining dilution: 2.5%

Plant Process Cost: US$7.4/lb U3O8

Recovery U3O8: 85%

Royalties: 1.2%

Metallurgical factors or assumptions

The basis for assumptions or predictions regarding metallurgical amenability. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential metallurgical methods, but the assumptions regarding metallurgical treatment processes and parameters made when reporting Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the metallurgical assumptions made.

No metallurgical testwork has been undertaken for Zona 7 however, numerous metallurgical testwork programs have been completed for deposits hosted in similar geological settings in close proximity to the Zona 7 deposit. The results of this testwork showed the mineralisation to be amenable to convention acid heap leach, with uranium recoveries in the order of 85%.

Environmental factors or assumptions

Assumptions made regarding possible waste and process residue disposal options. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider the potential environmental impacts of the mining and processing operation. While at this stage the determination of potential environmental impacts, particularly for a greenfields project, may not always be well advanced, the status of early consideration of these potential environmental impacts should be reported. Where these aspects have not been considered this should be reported with an explanation of the environmental assumptions made.

It is planned that all spent heap leach (ripios) material will be returned to the open pit which will be lined so as to encapsulate the ripios. Any Naturally Occurring Radioactive Material (NORM) or Acid Rock Drainage (ARD) waste will also be stored within the lined pit.

An Environmental Scoping Study will serve to define the scope and content of the Environmental and Social Impact Assessment.

Bulk density

Whether assumed or determined. If assumed, the basis for the assumptions. If determined, the method used, whether wet or dry, the frequency of the measurements, the nature, size and representativeness of the samples.

Bulk density values were derived from 304 solid‐fluid pycnometer measurements. These values have been validated with diamond core bulk density results obtained using the water immersion method. The in-situ dry bulk density values are:

Completely weathered: 2.33 g/cm3

Partially weathered: 2.43 g/cm3

Fresh rock: 2.66 g/cm3

The bulk density for bulk material must have been measured by methods that adequately account for void spaces (vugs, porosity, etc), moisture and differences between rock and alteration zones within the deposit.

Fresh and slightly weathered rock is competent enough to ensure the method used takes into account any rock porosity. A factor derived from comparison with DD core was used to adjust the weathered material.

Discuss assumptions for bulk density estimates used in the evaluation process of the different materials.

The density measurements have been classified by weathering intensity, defined by the geological logging. Three dominant zones have been identified - completely weathered, partially weathered and fresh rock. The average of the density data from each zone was applied in the resource model.

Classification

The basis for the classification of the Mineral Resources into varying confidence categories.

The reported MRE has been classified as Inferred after consideration of the following:

· Adequate geological evidence and drill hole sampling is available to imply geological and grade continuity.

· Adequate in-situ dry bulk density data is available to estimate appropriate tonnage factors.

· Adequate mining, metallurgy and processing knowledge to imply potential prospect for eventual economic extraction.

Whether appropriate account has been taken of all relevant factors (ie relative confidence in tonnage/grade estimations, reliability of input data, confidence in continuity of geology and metal values, quality, quantity and distribution of the data).

The reported MRE has been classified with consideration of the quality and reliability of the raw data, the confidence of the geological interpretation, the number, spacing and orientations of intercepts through the mineralised zones and knowledge of grade continuity gained from observations and geostatistical analysis.

Whether the result appropriately reflects the Competent Person's view of the deposit.

The reported MRE and its classification are consistent with the Competent Person's (CP) view of the deposit. The CP was responsible for determining the resource classification.

Audits or reviews

The results of any audits or reviews of Mineral Resource estimates.

Berkeley has undertaken a review of the previous MRE and concluded that the estimate was developed using industry standard methods and that the estimate was considered to reflect the understanding of the geology and grade continuity.

Malcolm Titley (CP, Geology Consultant, Maja Mining Limited) reviewed the reported MRE and concluded that the estimate appropriately represents the grade and tonnage distribution of uranium mineralisation at confidence levels commensurate with the Inferred resource classification.

Discussion of relative accuracy/ confidence

Where appropriate a statement of the relative accuracy and confidence level in the Mineral Resource estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the resource within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors that could affect the relative accuracy and confidence of the estimate.

The confidence level is reflected in the resource classification category chosen for the reported MRE. The definition of Inferred Mineral Resources is appropriate for the level of study and the geological confidence imparted by the drilling grid.

The reported MRE is considered appropriate and representative of the grade and tonnage at the 200ppm U3O8 cut-off grade. The application of geostatistical methods has helped to increase the confidence of the model and quantify the relative accuracy of the resource on a global scale. It relies on historical data being of similar standard as recent infill drilling. The relevant tonnages and grade are variable on a local scale.

The nature of the mineralisation and the relatively high nugget effect may result in local grade estimates being lower confidence, with significant smoothing of the grade tonnage distribution at cut-off grades above 200ppm U3O8. A review of the grade estimation methodology is recommended before analysing the any potential resource at cut-off grades above 200ppm U3O8.

The CP considers that the current drilling grid is insufficient for classification of the Mineral Resource as Indicated or Measured.

The statement should specify whether it relates to global or local estimates, and, if local, state the relevant tonnages, which should be relevant to technical and economic evaluation. Documentation should include assumptions made and the procedures used.

The Zona 7 deposit is likely to have local variability. The global assessment is an indication of the average tonnages and grade estimate for each geological domain.

These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.

No production has been carried out at Zona 7.

November 2014

Deposit

Name

Resource

Category

Tonnes

(Mt)

U3O8

(ppm)

U3O8

(Mlbs)

Retortillo

Indicated

14.4

378

12.0

Inferred

1.8

359

1.4

Total

16.2

376

13.4

Zona 7

Inferred

23.2

589

30.1

Las Carbas

Inferred

0.6

443

0.6

Cristina

Inferred

0.8

460

0.8

Caridad

Inferred

0.4

382

0.4

Villares

Inferred

0.7

672

1.1

Villares North

Inferred

0.3

388

0.2

Total Retortillo Satellites

Inferred

2.8

492

3.0

Alameda

Indicated

20.0

455

20.1

Inferred

0.7

657

1.0

Total

20.7

462

21.1

Villar

Inferred

5.0

446

4.9

Alameda Nth Zone 2

Inferred

1.2

472

1.3

Alameda Nth Zone 19

Inferred

1.1

492

1.2

Alameda Nth Zone 21

Inferred

1.8

531

2.1

Total Alameda Satellites

Inferred

9.1

472

9.5

Gambuta

Inferred

12.7

394

11.1

Salamanca Project

Indicated

34.4

423

32.0

Inferred

50.3

506

56.1

Total

84.7

472

88.2