Interim Results
Berkeley Resources Limited
16 March 2007
BERKELEY RESOURCES LIMITED
ABN 40 052 468 569
FINANCIAL REPORT
FOR THE HALF-YEAR ENDED
31 DECEMBER 2006
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 2006 ('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
Dr James Ross
Senor Jose Ramon Esteruelas (appointed 16 November 2006)
Mr Sean James (appointed 28 July 2006)
Mr Ian Middlemas (resigned 16 November 2006)
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 2006 was
$2,206,301 (31 December 2005: $1,534,020).
This result included the following significant items:
* A $1,000,000 gain on the sale of the Strelley and Kangan North properties in
the Pilbara region of Western Australia;
* An expense of $841,107 in relation to the acquisition of ENUSA's exploration
database for the Company's Salamanca I project; and
* A non-cash expense of $447,750 in relation to the issue of incentive options
(Refer Note 14).
Review of Operations
During the half year ended 31 December 2006 the Company continued its data
review of the Spanish uranium exploration projects to provide confirmation of
their prospectivity and prioritise exploration targets. Drilling was commenced
on the Salamanca I project with very encouraging initial results confirming the
presence of uranium mineralisation at Retortillo. Two drill rigs are now working
at Retortillo. At the Caceres III project, a review of a number of high grade
previous drill results and extension of a large radiometric anomaly highlighted
the potential of this area, with drilling expected to commence soon.
Also during the half year, the Company agreed to acquire from the Spanish
national uranium company, ENUSA, that company's exploration database for the
Salamanca I project. The data is expected to substantially advance the Company's
objective of generating JORC compliant resources for the project.
Senor Jose Ramon Esteruelas, a very experienced Spanish executive, and Mr Sean
James, former managing Director of the Rossing Uranium Mine in Namibia, were
appointed to the Board of Directors.
The Company sold its Strelley and Kangan North properties in the Pilbara region
of Western Australia for cash and share consideration resulting in a gain on
sale of A$1m.
Berkeley is also reviewing other uranium exploration opportunities.
Corporate
The following material corporate events occurred during the half year:
* On 28 July 2006, Mr Sean James was appointed a Director of the Company;
* On 26 September 2006, the Company announced it was proceeding with the
admission of its ordinary shares to trading the Alternative Investment Market
(AIM) of the London Stock Exchange. The Company's securities commenced trading
on AIM on 6 December 2006;
* On 16 November 2006, Senor Jose Ramon Esteruelas was appointed a Director of
the Company and Mr Ian Middlemas resigned as a Director of the Company;
* On 29 November 2006 the Company announced the sale of its Strelley and Kangan
North properties in the Pilbara region of Western Australia to Atlas Iron
Limited. In consideration for the sale the Company received $350,000 cash and
1.3 million Atlas Iron Limited ordinary shares values at $650,000 resulting in
a gain on sale of A$1 million; and
* During the half year up to 30 November 2006, 12,111,374 Listed Options and
4,850,000 Unlisted Options were exercised which raised approximately $3.4
million. 157,000 Listed Options were not exercised as at the expiry date of 30
November 2006.
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 15 and forms part of this
Directors' Report.
Signed in accordance with a resolution of Directors.
MATTHEW SYME
Managing Director
London, 15 March 2007
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 2006 and the performance for the half-year ended on
that date of the consolidated entity; and
(ii) comply 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
London, 15 March 2007
CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE HALF YEAR ENDED 31 DECEMBER 2006
Half Year Ended 31 Half Year Ended 31
December December
2006 2005
$ $
Revenue from continuing operations 4 1,158,890 38,238
Administration costs (1,026,817) (237,976)
Business development costs (187,151) (102,768)
Capitalised exploration expenditure written off - (374)
Exploration costs (1,853,394) (496,207)
Share based payments expense (447,750) (734,933)
Loss before income tax (2,356,222) (1,534,020)
Income tax expense - -
(2,356,222) (1,534,020)
Loss for the half-year
Loss attributable to minority interest 149,921 -
Loss attributable to members of Berkeley Resources (2,206,301) (1,534,020)
Basic earnings per share (cents per share) (2.9) (3.5)
Diluted earnings per share (cents per share) (2.9) (3.5)
The above Consolidated Income Statement should be read in conjunction with the
accompanying notes.
CONDENSED CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2006
Restated
31 December 2006 30 June
$ 2006
$
Note
ASSETS
Current Assets
Cash and cash equivalents 8,030,464 6,295,162
Trade and other receivables 62,468 36,594
Total Current Assets 8,092,932 6,331,756
Non-current Assets
Exploration expenditure 3,113,054 3,085,253
Plant and equipment 183,273 120,966
Other financial assets 670,830 9,247
Total Non-current Assets 3,967,157 3,215,466
TOTAL ASSETS 12,060,089 9,547,222
LIABILITIES
Current Liabilities
Trade and other payables 1,227,182 343,659
Provisions 32,103 24,680
Total Current Liabilities 1,259,285 368,339
TOTAL LIABILITIES 1,259,285 368,339
NET ASSETS 10,800,804 9,178,883
EQUITY
Issued capital 7 18,837,423 14,258,232
Reserves 8 1,577,670 2,170,538
Accumulated losses (9,777,609) (7,571,308)
Parent Entity Interest 10,637,484 8,857,462
Minority interest 163,320 321,421
TOTAL EQUITY 10,800,804 9,178,883
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 2006
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 2005 5,039,922 295,224 - - (3,829,882) 1,505,264 - 1,505,264
Net loss for the period - - - - (1,534,020) (1,534,020) - (1,534,020)
Issue of shares (net of 997,360 - - - - 997,360 - 997,360
expenses)
Exchange differences arising
on translation of foreign
operations - - - - - - - -
Net unrealised gain on held
for sale financial assets - - - - - - - -
Exercise of options (net of 224,491 - - - - 224,491 - 224,491
expenses)
Cost of share based payments - 734,933 - - - 734,933 - 734,933
As at 31 December 2005 6,261,773 1,030,157 - - (5,363,902) 1,928,028 - 1,928,028
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
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 2006
Half Year Ended 31 Half Year Ended 31
December 2006 December 2005
$ $
Cash flows from operating activities
Payments to suppliers and employees (2,197,090) (777,087)
Interest received 158,890 38,238
Net cash outflows from operating activities
(2,038,200) (738,849)
Cash flows from investing activities
Payments for capitalised exploration
expenditure (27,800) -
Proceeds from sale of exploration projects 350,000 -
Payments for plant and equipment (74,123) -
Net cash inflow from investing activities 248,077 -
Cash flows from financing activities
Proceeds from issue of shares 3,542,275 1,287,900
Share issue expenses (4,491) (64,240)
Net cash inflow from financing activities 3,537,784 1,223,660
Net increase in cash and cash equivalents 1,747,661 484,811
Net foreign exchange differences (12,359) -
Cash and cash equivalents at the beginning of
the half year 6,295,162 1,392,272
Cash and cash equivalents at the end of the
half year 8,030,464 1,877,083
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 2006.
The annual financial report of the Company as at and for the year ended 30 June
2006 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.
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 2006 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 15 March
2007.
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 2006.
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.
4. REVENUE FROM CONTINUING OPERATIONS
Consolidated Consolidated
31 December 31 December
2006 2005
$ $
Interest revenue 158,890 38,238
Gain on disposal of assets 1,000,000 -
1,158,890 38,238
5. MINORITY INTEREST
Interest in:
Capital 321,421 -
Share of Net Loss (149,921) -
Share of Foreign Currency Translation Reserves (8,180) -
163,320 -
6. SEGMENT INFORMATION
The Consolidated Entity operates in the mineral exploration industry in the
following geographical segments:
Geographical Segment Australia China Spain Consolidated Entity
Half year Half year Half year Half year Half year Half year Half year Half year
ended ended ended ended ended ended ended ended
31 Dec 31 Dec 2005 31 Dec 31 Dec 31 Dec 2006 31 Dec 31 Dec 2006 31 Dec 2005
2006 2006 2005 2005
$ $ $ $ $ $ $ $
Revenue
Other revenues 1,000,000 38,238 - - 158,890 - 1,158,890 38,238
Unallocated revenue - -
Total revenue 1,158,890 38,238
Results
Segment result 1,000,000 (1,065,233) - (149,038) (3,169,071) (319,749) (2,169,071) (1,534,020)
Unallocated expenses (187,151) -
Loss from ordinary
activities before income
tax expense (2,356,222) (1,534,020)
Income tax expense - -
Loss attributable to
outside equity interests 149,921 -
Net loss (2,206,301) (1,534,020)
7. CONTRIBUTED EQUITY
Consolidated Consolidated
31 December 30 June
2006 2006
$ $
(a) Issued and paid up capital:
89,091,695 (30 June 2006: 71,130,321) fully paid ordinary shares 18,837,423 14,258,232
(b) Movements in ordinary share capital during the past six months were as
follows:-
Date Details Number of Shares Issue $
Price
$
1 Jul 06 Opening Balance 71,130,321 - 14,258,232
7 Jul 06 - 5
Dec 06 Exercise of Listed Options 12,111,374 0.20 2,422,275
Transfer from option reserve - - 60,557
5 Sep 06 - 5
Dec 06 Exercise of Unlisted $0.20 Options 4,850,000 0.20 970,000
Transfer from option reserve - - 732,650
Share issue expenses - - (6,737)
4 Dec 06 Exercise of Director Incentive Options 1,000,000 0.15 150,000
Transfer from option reserve - - 252,000
Share issue expenses - - (1,554)
31 Dec 06 Closing Balance 89,091,695 - 18,837,423
8. RESERVES
Consolidated Consolidated
31 December 30 June
2006 2006
$ $
(a) Option reserve:
Nil (30 June 2006: 12,268,374) listed options 785 61,342
Nil (30 June 2006: 4,850,000) unlisted options - 732,650
Nil (30 June 2006: 1,000,000) $0.15 director incentive options - 252,000
1,000,000 (30 June 2006: 1,000,000) $0.20 director incentive options 229,000 229,000
1,000,000 (30 June 2006: 1,000,000) $0.25 director incentive options 208,000 208,000
10,600,000 (30 June 2006: 10,600,000) $0.70 unlisted options 687,546 687,546
750,000 (30 June 2006: Nil) $1.00 incentive options 447,750 -
1,573,081 2,170,538
8. RESERVES (CONT.)
(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 $0.20 $0.70 $1.00 Grant
Unlisted Director Unlisted Incentive Value
Options Options Incentive Options Options
Options $
($various)
1 Jul 06 Opening Balance 12,268,374 4,850,000 3,000,000 10,600,000 - - 2,170,538
7 Jul 06 -
5 Dec 06 Exercise of Options(12,111,374) - - - - - (60,557)
30 Nov 06 Expiry of Options (157,000) - - - - - -
5 Sep 06 -
5 Dec 06 Exercise of Options - (4,850,000) - - - - (732,650)
4 Dec 06 Exercise of Options - - (1,000,000) - - - (252,000)
5 Dec 06 Grant to Directors - - - - 750,000 0.597 447,750
31 Dec 06 Closing Balance - - 2,000,000 10,600,000 750,000 - 1,573,081
(c) Foreign Currency Translation reserve:-
Consolidated Consolidated
31 December 30 June
2006 2006
$ $
Balance at 1 July 2006 - -
Translation of foreign operations (8,411) -
Balance at 31 December 2006 (8,411) -
(d) Net Unrealised Gains reserve:-
Consolidated Consolidated
31 December 30 June
2006 2006
$ $
Balance at 1 July 2006 - -
Unrealised gain on available for sale financial assets 13,000 -
Balance at 31 December 2006 13,000 -
9. NON-CASH FINANCING AND INVESTMENT ACTIVITIES
31 December 2006
During the half year ending 31 December 2006, the Company disposed of its interest in the Strelley and Kangan
North exploration projects in the Pilbara region of Western Australia to Atlas Iron Limited. In consideration
for the sale, the Company received $350,000 in cash, 1.3 million Atlas Iron Limited shares valued at $650,000
and a pro-rata reimbursement of tenement holding expenses of $14,332.
Consideration $
Cash received 350,000
Atlas Iron shares received (1,300,000) @ $0.50 each 650,000
1,000,000
Less non-cash consideration (650,000)
Net cash inflow upon disposal 350,000
Net Assets Disposed
Consideration received and reimbursement of costs 1,014,332
Less reimbursement of tenement costs (14,332)
1,000,000
Less book value of assets on disposal -
Gain on disposal of exploration projects 1,000,000
10. Contingent Liabilities
Since the last annual reporting date, there has been no material change in
contingent liabilities.
11. Dividends Paid or Provided For
No dividend has been paid or provided for during the half year.
12. Subsequent Events After Balance Date
There were no significant events occurring after balance date requiring disclosure.
13. COMPARITIVES
The comparative figure at 30 June 2006 have been restated to ensure disclosure
is consistent with the disclosures at 31 December 2006. This restatement has no
impact on the previously disclosed parent entity interest in reserves or
accumulated losses.
14. SHARE BASED PAYMENTS
On 5 December 2006, 750,000 incentive options were granted to directors of the
Company pursuant to shareholder approval. The exercise price of the incentive
options is $1.00 and are exercisable on or before 30 November 2008. 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 $1.09
Dividend yield -
Volatility 95%
Risk-free interest rate 5.89%
Expected life of option 1.989 years
The estimated fair value of each incentive option is $0.597.
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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