Interim Results
Berkeley Resources Limited
13 March 2008
BERKELEY RESOURCES LIMITED
ABN 40 052 468 569
FINANCIAL REPORT
FOR THE HALF-YEAR ENDED
31 DECEMBER 2007
CORPORATE DIRECTORY
Directors Share Registry
Dr Robert Hawley - Chairman Australia
Mr Matthew Syme - Managing Director Computershare Investor Services Pty Ltd
Mr Scott Yelland - Chief Operating Officer Level 2
Dr James Ross 45 St Georges Terrace
Senor Jose Ramon Esteruelas Perth WA 6000
Mr Sean James Telephone: +61 8 9323 2000
Facsimile: +61 8 9323 2033
Company Secretary
Mr Clint McGhie United Kingdom
Computershare Investor Services Plc Registered Office
PO Box 82 Level 9, BGC Centre
The Pavillions 28 The Esplanade
Bridgwater Road Perth WA 6000
Bristol BS99 7NH Australia
Telephone: +44 870 889 3105 Telephone: +61 8 9322 6322
Facsimile: +61 8 9322 6558
Stock Exchange Listings
Australia
Auditor Australian Securities Exchange
Stantons International Home Branch - Perth
2 The Esplanade
Website Perth WA 6000
www.berkeleyresources.com.au
United Kingdom
Email London Stock Exchange - AIM
info@berkeleyresources.com.au 10 Paternoster Square
London EC4M 7LS
ASX Code
BKY - Fully paid ordinary shares
AIM TIDM
BKY - Fully paid ordinary shares
DIRECTORS' REPORT
The Board of Directors of Berkeley Resources Limited present their report on the
consolidated entity of Berkeley Resources Limited ('the Company' or 'Berkeley
Resources') and the entities it controlled during the half-year ended 31
December 2007 ('Consolidated Entity').
DIRECTORS
The names of the Directors of Berkeley Resources in office during the half-year
and until the date of this report are:
Dr Robert Hawley
Mr Matthew Syme
Mr Scott Yelland (appointed 1 February 2008)
Dr James Ross
Senor Jose Ramon Esteruelas
Mr Sean James
Unless otherwise disclosed, Directors were in office from the beginning of the
half-year until the date of this report.
REVIEW AND RESULTS OF OPERATIONS
Operating Results
Net operating loss after tax for the half-year ended 31 December 2007 was
$5,377,393 (31 December 2006: $2,206,301).
This result included the following significant items:
O Exploration costs associated with the Company's Spanish uranium projects
of $4,458,221;
O A non-cash expense of $674,581 in relation to the issue of employee
options (Refer Note 11).
Review of Operations
During the half year ended 31 December 2007 the Company continued its focus on
developing its uranium exploration projects in Spain.
Within the Salamanca I project, exploration activities were focused on a
drilling program to allow the calculation of a revised resource at the
Retortillo deposit and the testing of radiometric anomalies in areas previously
undrilled within the license area. The program included diamond and reverse
circulation ('RC') drilling. The Company had success in achieving both of these
objectives with a new discovery of uranium mineralisation at Santidad, 2km
northwest of the Company's main Retortillo deposit and an upgraded resource
calculation released in November 2007.
The resource at the main Retortillo deposit increased to 13 million lbs at
615ppm U3O8, whilst there was a maiden inferred resource of 2.9 million lb at
382ppm at the Santidad deposit.
An airborne geophysical survey was completed over key target areas. Aretech
Solutions completed a 5,924 line kilometre, low level, close-spaced airborne
magnetic and radiometric survey. The survey covered Salamanca I, part of
Salamanca II, and the Caceres VI and Toledo II areas.
Interpreted results of the survey released in February 2008 confirmed the
potential to add additional uranium resources in outcropping and covered areas,
in proximity to the existing resource base. In particular, it significantly
enlarged target areas associated with known uranium mineralisation at the Zona 7
deposit, and at the two previously mined areas, Mina Caridad and Mina Cristina.
It has also identified covered extensions of favourable lithology along strike
from the Retortillo and Santidad depositions.
A vigorous new program of RC drilling is underway with the aim of assessing the
highest priority targets over the next six months.
The successful increase in the resource base at Salamanca I, along with the
potential for additional resources, gave the Company impetus to commence a
scoping study on the potential for mining at Salamanca I. AMC Consultants were
engaged to prepare the study. The study was completed and the results were
released in February 2008, confirming the potential economic viability of the
project. The study was based on the projects previously announced JORC inferred
and indicated resources of 16.9 million lb of U3O8.
Outcomes of the study included potential production of approximately 12.1
million lb U3O8 over 10 years and average cash operating costs of US$25 per lb
of U3O8. Initial capital costs were calculated at US$109 million for a plant
rated to process 1.5 mtpa. The plant design included in these calculations were
scaled to allow for potential future additional resources.
The Company continues to examine new opportunities in mineral exploration in
Spain and elsewhere.
Corporate
The following material corporate events occurred during or since the end of the
half year ended 31 December 2007:
• On 6 August 2007, the Company issued 2,970,000 Unlisted Options to
employees in accordance with the Company's Employee Option Scheme. The options
are exercisable for $1.86 each on or before 5 August 2011. Vesting conditions
apply.
• On 6 September 2007 the Company announced the new discovery of uranium
mineralisation at Santidad, 2km northwest of the Company's main Retortillo
deposit.
• On 30 September 2007, 2,000,000 Unlisted Options were exercised which
raised approximately $0.45 million.
• On 19 November 2007, the Company advised the results of an upgraded
resource calculation for the flagship Salamanca I project, including the
Retortillo deposit and the new Santidad discovery.
• In January 2008, Berkeley disposed of its holding in 1,300,000 shares
in Atlas Iron Limited on market. The Company received net proceeds of
$2,584,785 in consideration for these shares.
• On 1 February 2008, Mr Scott Yelland, the Company's Chief Operating
Officer, was appointed a Director of the Company.
• On 5 February 2008, Berkeley presented the interpreted results of the
aerial radiometric and magnetic survey flown over the Salamanca I project.
• On 14 February 2008, the Company advised that a Scoping Study on
mining at the Salamanca I project, prepared by AMC Consultants, confirmed the
potential economic viability of the project.
AUDITOR'S INDEPENDENCE DECLARATION
Section 307C of the Corporations Act 2001 requires our auditors, Stantons
International, to provide the Directors of Berkeley Resources Limited with an
Independence Declaration in relation to the audit of the half-year financial
report. This Independence Declaration is on page 16 and forms part of this
Directors' Report.
Signed in accordance with a resolution of Directors.
MATTHEW SYME
Managing Director
Perth, 13 March 2008
DIRECTORS' DECLARATION
In accordance with a resolution of the Directors of Berkeley Resources Limited,
I state that:
In the opinion of the Directors:
(a) the financial statements and notes of the consolidated entity are in
accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the financial position as at 31
December 2007 and the performance for the half-year ended on that date of the
consolidated entity; and
(ii) complying with Accounting Standard AASB 134 Interim Financial
Reporting and the Corporations Regulations 2001; and
(b) there are reasonable grounds to believe that the Company will be able
to pay its debts as and when they become due and payable.
On behalf of the Board
MATTHEW SYME
Managing Director
Perth, 13 March 2008
CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE HALF YEAR ENDED 31 DECEMBER 2007
Half Year Ended 31 Half Year Ended
December 31 December
2007 2006
$ $
Revenue from continuing operations 4 743,813 1,158,890
Administration costs (921,924) (1,026,817)
Business development costs (119,005) (187,151)
Exploration costs (4,458,221) (1,853,394)
Share based payments expense (674,581) (447,750)
Loss before income tax (5,429,918) (2,356,222)
Income tax expense - -
(5,429,918) (2,356,222)
Loss for the half-year
Loss attributable to minority interest (52,525) (149,921)
Loss attributable to members of Berkeley Resources (5,377,393) (2,206,301)
Limited
Loss for the half-year (5,429,918) (2,356,222)
Basic earnings per share (cents per share) (5.24) (2.9)
Diluted earnings per share (cents per share) (5.24) (2.9)
The above Consolidated Income Statement should be read in conjunction with the
accompanying notes.
CONDENSED CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2007
31 December 2007 30 June
$ 2007
$
Note
ASSETS
Current Assets
Cash and cash equivalents 20,964,253 25,535,846
Available for sale financial asset 3,120,000 -
Other financial assets 100,721 -
Trade and other receivables 840,587 327,538
Total Current Assets 25,025,561 25,863,384
Non-current Assets
Exploration expenditure 4,181,867 4,135,220
Property, plant and equipment 470,763 232,184
Other financial assets 16,841 1,802,015
Total Non-current Assets 4,669,471 6,169,419
TOTAL ASSETS 29,695,032 32,032,803
LIABILITIES
Current Liabilities
Trade and other payables 1,272,602 642,182
Provisions 36,993 34,432
Total Current Liabilities 1,309,595 676,614
TOTAL LIABILITIES 1,309,595 676,614
NET ASSETS 28,385,437 31,356,189
EQUITY
Issued capital 7 41,444,842 40,560,013
Reserves 8 6,203,867 4,604,619
Accumulated losses (19,263,272) (13,885,879)
Parent Interest 28,385,437 31,278,753
Minority interest - 77,436
TOTAL EQUITY 28,385,437 31,356,189
The above Consolidated Balance Sheet should be read in conjunction with the
accompanying notes.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE HALF-YEAR ENDED 31 DECEMBER 2007
Attributable to equity holder of the parent Minority Total equity
Issued Option Foreign Net Accumulated Total interest
Capital Premium Currency Unrealised Losses
Reserve Translation Gains
Reserve Reserve
$ $ $ $ $ $ $ $
As at 1 July 2006 14,258,232 2,170,538 - - (7,571,308) 8,857,462 321,421 9,178,883
Net loss for the period - - - - (2,206,301) (2,206,301) (149,921) (2,356,222)
Issue of shares (net of 3,533,984 - - - - 3,533,984 - 3,533,984
expenses)
Exchange differences arising
on translation of foreign
operations - - (8,411) - - (8,411) (8,180) (16,591)
Net unrealised gain on held
for sale financial assets
- - - 13,000 - 13,000 - 13,000
Exercise of options (net of 1,045,207 (1,045,207) - - - - - -
expenses)
Cost of share based payments - 447,750 - - - 447,750 - 447,750
As at 31 December 2006 18,837,423 1,573,081 (8,411) 13,000 (9,777,609) 10,637,484 163,320 10,800,804
As at 1 July 2007 40,560,013 3,482,581 (21,962) 1,144,000 (13,885,879) 31,278,753 77,436 31,356,189
Net loss for the period - - - - (5,377,393) (5,377,393) (52,525) (5,429,918)
Issue of shares (net of 447,044 - - - - 447,044 - 447,044
expenses)
Exchange differences arising
on translation of foreign
operations - - 36,452 - - 36,452 (24,911) 11,541
Net unrealised gain on held
for sale financial assets - - - 1,326,000 - 1,326,000 - 1,326,000
Exercise of options (net of 437,000 (437,000) - - - - - -
expenses)
Transfer from reserve 785 (785) - - - - - -
Cost of share based payments - 674,581 - - - 674,581 - 674,581
As at 31 December 2007 41,444,842 3,719,377 14,490 2,470,000 (19,263,272) 28,385,437 - 28,385,437
The above Consolidated Statement of Changes in Equity should be read in
conjunction with the accompanying notes.
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
FOR THE HALF-YEAR ENDED 31 DECEMBER 2007
Half Year Ended 31 Half Year Ended 31
December 2007 December 2006
$ $
Cash flows from operating activities
Payments to suppliers and employees (5,477,387) (2,197,090)
Interest received 743,813 158,890
Net cash outflows from operating activities (4,733,574) (2,038,200)
Cash flows from investing activities
Payments for capitalised exploration
expenditure (31,871) (27,800)
Proceeds from sale of exploration projects - 350,000
Payments for plant and equipment (230,164) (74,123)
Security deposit (97,417) -
Other financial assets (8,256) -
Net cash (outflow)/inflow from investing activities (367,708) 248,077
Cash flows from financing activities
Proceeds from issue of shares 450,000 3,542,275
Share issue expenses (2,956) (4,491)
Net cash inflow from financing activities 447,044 3,537,784
Net increase in cash and cash equivalents (4,654,238) 1,747,661
Net foreign exchange differences 82,645 (12,359)
Cash and cash equivalents at the beginning of
the half year 25,535,846 6,295,162
Cash and cash equivalents at the end of the
half year 20,964,253 8,030,464
The above Consolidated Cash Flow Statement should be read in conjunction with
the accompanying notes.
1. REPORTING ENTITY
Berkeley Resources Limited (the 'Company') is a company domiciled in Australia.
The interim financial report of the Company is as at and for the six months
ended 31 December 2007.
The annual financial report of the Company as at and for the year ended 30 June
2007 is available upon request from the Company's registered office.
2. STATEMENT OF COMPLIANCE
The interim financial report is a general purpose financial report which has
been prepared in accordance with Accounting Standard AASB 134: Interim Financial
Reporting and the Corporations Act 2001.
Since 1 July 2007 the Group has adopted the following Standards and
Interpretations mandatory for annual periods beginning on or after 1 January
2007. Adoption of these Standards and Interpretations did not have any effect on
the financial performance or position of the Group.
• AASB 7 Financial Instruments: Disclosures
• AASB 2005-10 Amendments to Australian Accounting Standards (AASB 132, 101,
114,117,133,139, 1, 4, 1023 and 1038)
• AASB 2007-04 Amendments to Australian Accounting Standards arising from ED
151 and other amendments
• AASB 2007-7 Amendments to Australian Accounting Standards (AASB 1, 2, 4, 5,
107 and 108)
This interim financial report does not include all the information of the type
normally included in an annual financial report. Accordingly, this report is to
be read in conjunction with the annual report of Berkeley Resources Limited for
the year ended 30 June 2007 and any public announcements made by Berkeley
Resources Limited during the interim reporting period in accordance with the
continuous disclosure requirements of the Corporations Act 2001.
The financial report has been prepared on a historical basis except for
available for sale financial assets which are shown at fair value.
For the purpose of preparing the half year financial report, the half year has
been treated as a discreet reporting period.
The interim financial report was approved by the Board of Directors on 11 March
2008.
3. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies applied by the Company in this interim financial report
are the same as those applied by the Company in its financial report as at and
for the year ended 30 June 2007.
The adoption of amending standards mandatory for annual periods beginning on or
after 1 January 2006 are either not applicable to the Consolidated Entity or
have no material impact.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE HALF YEAR ENDED 31 DECEMBER 2007
4. SEGMENT INFORMATION
The Consolidated Entity operates in the mineral exploration industry in the
following geographical segments:
Geographical Segment Australia Spain Consolidated Entity
Half year Half year Half year Half year Half year Half year
ended ended ended ended ended ended
31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006 31 Dec 2007 31 Dec 2006
$ $ $ $ $ $
Revenue
Other revenues 743,656 1,000,000 157 158,890 743,813 1,158,890
Unallocated revenue - -
Total revenue 743,813 1,158,890
Results
Segment result (1,462,919) 1,000,000 (3,847,544) (3,169,071) (5,310,463) (2,169,071)
Unallocated expenses (119,455) (187,151)
Loss from ordinary activities
before income tax expense (5,429,918) (2,356,222)
Income tax expense - -
Loss attributable to outside equity
interests 52,525 149,921
Net loss (5,377,393) (2,206,301)
5. REVENUE FROM CONTINUING OPERATIONS
Consolidated Consolidated
31 December 31 December
2007 2006
$ $
Interest revenue 743,813 158,890
Gain on disposal of assets - 1,000,000
743,813 1,158,890
6. MINORITY INTEREST
Consolidated Consolidated
31 December 30 June
2007 2007
$ $
Interest in:
Capital 1,006,888 1,006,888
Reserves (43,855) (18,944)
Accumulated Losses (963,033) (910,508)
- 77,436
The minorities do not fund any exploration costs and their interests dilute as
the funds advanced by Berkeley Resources Ltd are converted into shares. At 31
December 2007 the minorities share of losses exceed their share of issued
capital and reserves. Minority losses in excess of their share of equity are
allocated to Berkeley Resources Ltd.
7. CONTRIBUTED EQUITY
Consolidated Consolidated
31 December 30 June
2007 2007
$ $
(a) Issued and paid up capital:
103,591,695 (30 June 2007: 101,591,695) fully paid ordinary shares 41,444,842 40,560,013
(b) Movements in ordinary share capital during the past six months were as
follows:-
Date Details Number of Shares Issue $
Price
$
1 Jul 07 Opening Balance 101,591,695 - 40,560,013
Exercise of Unlisted $0.20 Options 1,000,000 0.20 200,000
Transfer from option reserve - - 229,000
Exercise of Unlisted $0.25 Options 1,000,000 0.25 250,000
Transfer from option reserve - - 208,000
Transfer from option reserve - - 785
Share issue expenses - - (2,956)
31 Dec 07 Closing Balance 103,591,695 - 41,444,842
8. RESERVES
(a) Consolidated Consolidated
31 December 30 June
2007 2007
$ $
Option reserve:
Nil (30 June 2006: Nil) listed options -
785
Nil (30 June 2007: 1,000,000) $0.20 director incentive options - 229,000
Nil (30 June 2007: 1,000,000) $0.25 director incentive options - 208,000
10,600,000 (30 June 2007: 10,600,000) $0.70 unlisted options 687,546 687,546
2,250,000 (30 June 2007: 2,250,000) $1.00 incentive options 2,357,250 2,357,250
2,450,000 (30 June 2007: Nil) $1.86 employee incentive options 674,581 -
3,719,377 3,482,581
Foreign currency translation reserve 14,490 (21,962)
Net unrealised gains reserve 2,470,000 1,144,000
6,203,867 4,604,619
(b) Movements in options during the past six months were as follows:-
Date Details Number of Number of Number of Number of Number of Deemed $
Listed Director $0.70 $1.00 $1.86 Grant
Incentive Unlisted Incentive Employee Value
Options Options Options Options Incentive
Options $
($ various)
1 Jul 07 Opening Balance - 2,000,000 10,600,000 2,250,000 - - 3,482,581
Transfer to share
capital - - - - - - (785)
Exercise of Options - (2,000,000) - - - - (437,000)
Grant to Employees 817,757
(i) - - - - 2,970,000 1.121
Ceasing to be (143,176)
eligible employees - - - - (520,000) (1.121)
31 Dec 07 Closing Balance - - 10,600,000 2,250,000 2,250,000 - 3,719,377
(i) Incentive options granted to employees and consultants of
the Company following shareholder approval in accordance with Employee Share
Scheme. The fair value is recognised over the period during which the option
holders become unconditionally entitled to the options (ie the date of vesting
of the options), the latest date for which is 5 August 2010.
(ii) The value of employee options recognised on grant is
reversed where employees cease to be eligible employees of the Company prior to
the option vesting date.
(c) Foreign Currency Translation reserve:-
Consolidated Consolidated
31 December 30 June
2007 2007
$ $
Balance at 1 July 2007 (21,962) -
Translation of foreign operations 36,452 (21,962)
Balance at 31 December 2007 14,490 (21,962)
8. RESERVES (CONTINUED)
(d) Net Unrealised Gains reserve:-
Consolidated Consolidated
31 December 30 June
2007 2007
$ $
Balance at 1 July 2007 1,144,000 -
Unrealised gain on available for sale financial assets 1,326,000 1,144,000
Balance at 31 December 2007 2,470,000 1,144,000
9. Contingent Liabilities
Since the last annual reporting date, there has been no material change in contingent liabilities.
10. Dividends Paid or Provided For
No dividend has been paid or provided for during the half year.
11. SHARE BASED PAYMENTS
On 6 August 2007, 2,970,000 employee options were granted to employees of the Company pursuant to the Employee Option
Scheme which has received shareholder approval. The exercise price of the incentive options is $1.86 and, subject to
vesting conditions, the options are exercisable on or before 5 August 2011. The incentive options have been
independently valued using the Black-Scholes Option Valuation model, taking into account the terms and conditions upon
which the incentive options were granted. The following table lists the inputs to the model used in determining the
value:
Share Price at Grant Date $1.75
Dividend yield -
Volatility 85%
Risk-free interest rate 6.16%
Expected life of option 4 years
The estimated fair value of each incentive option is $1.121.
The value of employee options issued to employees who cease to be an eligible employee of the Company is reversed where
the option has yet to vest. 520,000 employee options which were yet to vest were issued to employees who ceased to be
eligible employees during the period.
12. Subsequent Events After Balance Date
Other than the events below, there were no significant events occurring after balance date requiring disclosure:
• In January 2008, Berkeley disposed of its holding in 1,300,000 shares in Atlas Iron Limited on market. The
Company received net proceeds of $2,584,785 in consideration for these shares. These shares were valued at $650,000 on
acquisition and at 31 December 2007 the recognised market value was $3,120,000. An actual gain on disposal of
$1,934,785 will be included in profit and loss for the year ended 30 June 2008 and the Net Unrealised Gain Reserve will
be adjusted to nil.
• On 1 February 2008, Mr Scott Yelland, the Company's Chief Operating Officer, was appointed a Director of the
Company.
• On 5 February 2008, Berkeley presented the interpreted results of the aerial radiometric and magnetic survey
flown over the Salamanca I project.
• On 14 February 2008, the Company advised that a Scoping Study on mining at the Salamanca I project, prepared by
AMC Consultants, confirmed the potential economic viability of the project.
Please note the auditors' Independence Declaration and Independent Review Report
can be viewed on the Company's website (www.berkeleyresources.com.au)
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