Quarterly Activities Report

RNS Number : 1209H

Berkeley Resources Limited

31 October 2008

 



Quarterly Activities Report

For the Quarter Ended

30 September 2008

Key Developments

Corporate

• Berkeley was chosen by the Spanish State uranium company, ENUSA, to conduct a feasibility study upon and ultimately develop ENUSA's uranium mining assets in Salamanca Province, including a permitted uranium processing plant and a number of extensively explored mining permits.

Exploration

• An initial inferred resource estimate of 9.23 million pounds of U308 at an average grade of 371ppm U308 (at a 200ppm U308 cut off grade) was calculated for the Gambuta uranium deposit in the Caceres Province in Spain. 

• Berkeley now has 100% owned, JORC compliant resources in Spain totalling 26.1 million pounds of U308.

• Higher grade intersections to the south west of the Zona 7 deposit in Salamanca I confirm the potential towards the Las Carbas project, situated 1.5km to the south.

• Further drilling at Caridad suggests continuity between the southern and northern zones of mineralization.

• Initial RC drilling at the Cristina project in Salamanca I intersected significant mineralization in 3 anomalous areas, from surface down to 60m.

• Drilling recommenced in the Retortillo project, where 7 diamond drill holes were completed to provide samples of mineralization for metallurgical testwork. The program of testwork will determine the size distribution of uranium, amenability to radiometric sorting, crushing and grinding characteristics and the ore's suitability to heap leaching.

Enquiries -    Managing Director:         Matt Syme            Tel: [phone]     

                     RBC Capital Markets:      Martin Eales        Tel: [phone]

  Corporate

In July, Berkeley was chosen by ENUSA Industrias Avanzadas S.A. as that company's partner to conduct a feasibility study upon and ultimately develop ENUSA's uranium mining assets in Salamanca Province.

The assets include a number of 'State Reserve' licence areas which have been extensively explored by ENUSA, but which do not presently contain resources compliant with the JORC Code. The partnership also includes access to the Quercus uranium processing plant, which was operated by ENUSA until 2003 and has been in care and maintenance (without a comminution circuit) since then.

Berkeley will complete a feasibility study on mining the State Reserves and processing through the Quercus plant. In parallel, Berkeley will continue to advance its 100% owned Salamanca projects - which currently have a JORC resource of 16.9m lbs of U3O8 - for possible processing through the Quercus plant, located about 30km away.

The companies are continuing negotiation of the terms of the partnership. The agreement will then be submitted to the Spanish Council of Ministers for approval. 

Further details will be advised when an agreement is completed.

EXPLORATION

Caceres VI Project

A 36 hole program was completed by Berkeley to provide an initial assessment of the Gambuta deposit. It consisted of 28 RC holes and 8 diamond drill holes which defined a continuous, structurally controlled, zone of mineralization, 250 - 350m wide, up to 94m below surface and extending for 1,500m in a west-north-westerly direction. This zone appears to extend beneath Tertiary and Quaternary cover to the north-west.

Uranium mineralization occurs within a sequence of strongly deformed Proterozoic spotted and banded grey to black phyllites which have been contact metamorphosed by Hercynian granites. The contacts between the phyllites and the granite to the east and northeast are tectonic. The sequence of host phyllites at Gambuta is similar to that hosting the Retortillo deposit in the Salamanca I license.

The main mineralised horizon averages 9.4m in thickness and occurs at an average depth of 18.0m, beneath Tertiary cover and shales. A lower mineralised horizon averages 2.1m in thickness and is separated from the main horizon by 16.3m of shales. A central, higher grade (+0.1% U3O8,) zone, about 100m wide, is evident in the north-western half of the deposit and is open along strike.

As no further drilling could be undertaken until October, due to the high risk fire season, a maiden resource was calculated with the following results:

Cut Off Grade (ppm U308)	Contained Ore (Mt)	Grade (ppm U308)	Contained U308 (Mlbs U308)
200	11.29	371	9.23
150	15.49	318	10.85
100	19.46	278	11.95

Future work

The next round of RC drilling commenced in October, with the aim of testing for north-westerly extensions of the deposit, beneath Tertiary and Quaternary cover. 

Salamanca 1 Project

Exploration drilling at the Caridad and Zona 7 prospects was completed and a new drilling campaign was started at the historically mined area at Cristina with encouraging results. In addition seven diamond holes were drilled at the Retortillo deposit to provide representative samples of mineralization for metallurgical test work. This work will determine the amenability of the Retortillo mineralization for heap leaching and radiometric sorting. 

The potential for shallow extensions of the Retortillo mineralization beneath tertiary cover to the south east of the deposit was tested with 14 water bores along 4km of strike. 

In addition, the detection of anomalous radiometrics in the Charcas water bore south west of the Retortillo deposit, revealed a new area with potential for Retortillo style mineralization.

The Caridad Prospect

The initial exploration program was completed, with 13 RC holes totalling 667m and 2 DD holes totalling 116m drilled during the quarter.

The 44 hole program at Caridad has identified uranium mineralization associated with two strong radiometric anomalies in a structurally complex area of black shales and phyllites in the nose of a large fold. The southern anomaly is centered on the historic Junta Energia Nuclear (JEN) underground and surface workings, with a second anomaly located approximately 200m to the North East.

The results indicate two mineralized zones, from 50-100m wide, with similar thickness and uranium grade. Their similarities suggest that the mineralization may be continuous over a strike length of 1km. Two diamond drill holes were drilled, one in each anomaly, and the geology indicates a strong structural component to the mineralization, with supergene redistribution in the upper 20m. 

Positive drilling assays are included in the appendix and notable intersections include:

Hole CARR-040                       4.0 metres @ 0.0849% U308 from 20.0m, and                            

                                                  2.0 metres @ 0.0248% U308 from 26.0m

The Cristina Prospect

Mina Cristina was the site of a limited surface mining operation by the Junta Energia Nuclear (JEN) in the 1960's and some workings remain, with high surface radiometric readings and secondary uranium showings at surface. 

The 2007 Berkeley airborne survey identified a strong radiometric anomaly coincident with the mine as well as two discrete anomalies approximately 0.5km to the south, collectively forming an anomalous zone of 1.2km x 1.0km.

These targets were tested during the quarter with 47 RC holes, averaging 55m deep. One diamond drill hole was drilled in the vicinity of the old mine to determine the style of mineralization.

Three discrete areas of mineralization were identified. The first was the anomaly to the north around the old working, plus a smaller discrete body 300m to the south. Several holes intersected mineralization, up to 6m wide, in east-west trending structures from just below the surface down to depths of 60m. 

Some notable intersections in the northern area include:

    Hole CRIR-007                 3.0 metres @ 0.0775% U308 from 3.0m, and                            

                                               4.0 metres @ 0.0923% U308 from 32.0m, and                                                     

                                               4.0 metres @ 0.1487% U308 from 49.0m

    Hole CRIR-008                 6.0 metres @ 0.0708% U308 from 4.0m

    Hole CRIR- 023               6.0 metres @ 0.0468% U308 from 11.0m

    Hole CRIR-034                4.0 metres @ 0.0467% U308 from 15.0m,  and

                                              2.0 metres @ 0.0350% U308 from 20.0m

The two anomalous area to the south west, resulted in intersections up to 7m in thickness down to depths of 34m. Notable intersections include:    

    Hole CRIR-012                7.0 metres @ 0.0747% U308 from 19m

    Hole CRIR- 040               6.0 metres @ 0.0810% U308 from 8.0m and                            

                                              2.0 metres @ 0.07781% U308 from 29.0m and                            

                                              3.0 metres @ 0.0593% U308 from 34.0m.    

One diamond drill hole was drilled to a depth of 86m at the site of the old workings to determine structural and geological controls on mineralization. It intersected strongly fractured phyllites with a strong structural component to the mineralization. Granite was intersected from 76m to 86m indicating a shallow dipping contact with the phyllites.

The Zona 7 Deposit

The second phase of drilling operations at Zona 7 was completed during the quarter, with 2 structural diamond drill holes and 2 RC holes drilled on the southwestern profile. Hole ZN7R-073 defined the northern edge of the deposit and strong mineralization highlighted the potential along strike to the south west towards the Las Carbas prospect.

Hole ZN7R-072                 13.0 metres @ 0.0472% U308 from 18.0m and                                     

                                           2.0 metres @ 0.0423% U308 from 33.0m and                             

                                           6.0 metres @ 0.1226% U308 from 48.0m

Two inclined diamond drill holes were also drilled on the south west profile and have again confirmed the complex nature of the Zona 7 mineralization. Drill core highlights the random distribution of mineralization, and strong deformation of stratigraphy.

Further work includes updating the geological interpretation to facilitate resource estimation and to assist in developing a drill program to assess the potential to the south west towards the Las Carbas mineralization located approximately 1.5km to the south west.

Retortillo: Metallurgical Sampling

Following a review of the Retortillo geological model by Berkeley and GRD Minproc (Perth) specialists, a drilling program was planned to provide representative samples for metallurgical test work.

The objectives of this program are:

• To determine if the ore is amenable to heap leaching, and, if so assess the suitability of resin ion exchange as a first stage in the recovery of uranium from the leach liquor.
  
• To establish the crushing and grinding characteristics of the ore.
  
• To determine the amenability of the ore to radiometric sorting.
  
• To verify the uranium distribution with size for as received material.

The program will be undertaken by SGS Mineral Services in Perth and Ultrasort Pty Ltd in NSW.

Seven HQ diamond drill holes were drilled during the quarter at selected locations to provide representative samples of mineralization for shipment to Australia.

 Retortillo South East Extension

A total of 14 water bore holes were drilled to the south east of the Retortillo deposit to determine the thickness of the tertiary cover over a prospective strike length of 4km. The depth of the Tertiary cover varies from 32m to 72m, with an average thickness of 48m. It appears that the cover is gradually thickening to the south east.

Charcas Water Bore

A water bore was drilled to a depth of 66m, to the south west of the quartzite ridge which forms the south west limit of the shales which host the Retortillo deposit.

Grey phyllitic shales were intersected beneath about 8m of tertiary cover to the bottom of the hole and anomalous radiometrics (366cps) were detected over the interval 54-58m. The depth and magnitude of the anomaly are consistent with holes drilled in close proximity to the Retortillo deposit. Therefore a new area of 4km x 0.5km, between the granite and the quartzite ridge, is now considered prospective for Retortillo mineralization.

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Dr James Ross, who is a Fellow of The Australian Institute of Mining and Metallurgy and a consultant to Berkeley Resources Limited. Dr Ross has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Dr Ross consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The full list of the Drilling Results are available on the company's website: www.berkeleyresources.com.au

 

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