Quarterly Activities Report

RNS Number : 3279C
Berkeley Resources Limited
30 April 2012
 



 

REPORT FOR QUARTER ENDED 31 MARCH 2012

 

SIGNIFICANT DEVELOPMENTS

Ø The Company initiated Arbitration proceedings against the joint venture partner, Enusa Industrias Avanzadas, S.A. ("Enusa") with a claim of >US$200m following repeated deadline extensions.

Ø Salamanca 1 Project progressed on a broad front with submission of core documents for the permitting process and commencement of large column tests.

Ø Encouraging down-hole radiometric results at the new Villares prospect were confirmed by the high grade assay results announced on 24 April. These include: 15m at 1,524ppm U3O8 from 1m in VIR001; and 9m at 2,363 ppm U3O8 from 6m in VIR007 at 200 ppm cut-off.

Ø Ian Middlemas was appointed Chairman and Robert Behets joined the board as a non-executive Director of the Company on 27 April 2012.  This followed the resignation of Brendan James as Managing Director and CEO now effective 27 April 2012.

Ø The Company made a placement of 5,000,000 shares and options to Mr Middlemas and Mr Behets to raise A$1.5m as part of their appointment to the board and to supplement working capital.

Ø A full review of the Company's activities in Spain will be undertaken during the next quarter following the introduction of the new board members.  The Company's estimated net cash position at the end of April is approximately A$38.5m, inclusive of the placement funds.  This reflects estimated incurred expenditure of A$3m to the end of April, including A$350,000 on the purchase of a farm and A$500,000 in drilling services at Salamanca 1.

 

 

 

 

Enquiries

Deputy Chairman

Jim Ross

Tel: +61 404 949 334

RBC Capital Markets

Martin Eales

Tel: +44 20 7029 7881

 



JOINT VENTURE WITH ENUSA:

 

The deadline for Enusa's assessment of the advanced form of the Mining Domain Feasibility Study (MDFS), and formation of the 90% Berkeley-owned joint venture company, NEWCO, was extended from 23 January, 2012, to 29 February, with the condition that Enusa responded to the advanced MDFS by 23 February.  As announced on 24 February Enusa did not accept this advanced version and, in addition, they did not form NEWCO on 29 February.  Therefore they are in breach of the Co-operation Agreement dated 29 January 2009.

 

The Co-operation Agreement clearly establishes that such a material breach requires that Enusa returns to Berkeley's Spanish subsidiary, Berkeley Minera Espana ("BME"), the non-amortised value of all its investments made and any evidenced expenses which BME may have incurred to carry out the Feasibility Study, whether or not it has been completed.  In addition, Enusa is to compensate BME for any damages caused, including any reasonable loss of profits.

 

Following this default, the Company entered discussions with SEPI, the 60% owners of Enusa, and agreed to refrain from initiating arbitration until 30 March.  Unfortunately, this final extension did not lead to a satisfactory outcome and the Board immediately initiated arbitration.

 

It is the opinion of Berkeley, and its legal advisors in Spain that Enusa has not met its contractual obligations under the Co-operation Agreement on a number of occasions.  BME, in addition to fulfilling its obligations, has consistently acted in good faith, and also provided Enusa with numerous opportunities to achieve a satisfactory outcome and avoid arbitration.  Apart from granting multiple extensions to postpone formation of NEWCO, It has also offered ENUSA alternative options to progress the project.  These alternatives have been aimed at minimising Enusa concerns, as they have been understood by Berkeley.

 

Berkeley considers that it has a strong case in arbitration.  This view is supported by a number of factors, including advice from BME's international legal advisors in Spain, who have considerable experience in successful commercial arbitration actions within the country.  BME is claiming compensation for the damages and losses caused by Enusa's breach of the Co-operation Agreement to a total amount estimated to be in excess of US$200m.

 

Regardless of this action, the Company has informed Enusa that it is prepared to collaborate at any time with the aim of achieving an amicable solution, independent of any arbitration proceedings.

 

SALAMANCA 1 PROJECT:

 

Overview:

 

Project activity progressed on a broad front during the quarter to build on the outcomes of the preliminary feasibility study, announced on 30 January, 2012.  The Company received confirmation from the Regional Government of Castilla y Leon that the Environmental Scoping Document was successfully processed.  In addition, the permit was received for the proposed site facilities, including core shed, analytical laboratories change rooms and office.  Key documents for the permitting process were submitted for approval, including: the Exploitation Plan; the Restoration and Closure plans; the Environmental Impact Assessment; and the Radiological Protection initial document.  It is anticipated that these documents will be distributed by the Regional Government for public consultation during the next June quarter.

 

Metallurgical test work was advanced at Mintek in Johannesburg and included column testing of representative mineralisation for the first three years of production (see below).  Diamond and RC drilling was focussed on upgrading of resources at Santidad and also providing initial samples for metallurgical test work, as detailed below.  In addition, exploration drilling in proximity to the Retortillo deposit was initiated, with the aim of supporting and extending the production profile at the Salamanca 1 Project.  Initial RC drilling at the new Villares prospect intersected shallow, high grade mineralisation.  Project engineering work was focussed on development of the hydrogeological and geotechnical models.

 

 

 

Drilling and Exploration:

 

Reverse circulation ("RC") and diamond drilling during the quarter is summarised in Table1 with respective totals of 7,790m and 735m.  Most RC drilling, and all diamond drilling, was focussed on the Santidad deposit, with 59 RC holes, totalling 3,331m, being drilled at the Villares prospect.

 

Santidad deposit:

 

The program of RC drilling to upgrade the inferred resources and undertake condemnation drilling for mine design, was completed for a total of 101 holes totalling 5,828m.  In addition, 12 diamond holes have provided additional geological information to enable a more detailed geological interpretation, plus samples for metallurgical test work.

 

Prospect

RC Q1

RC TOTAL

Holes

Metres

Holes

Metres

Retortillo-Santidad

74

4,459

74

4,459

Villares

59

3,331

59

3,331

Total

133

7,790

133

7,790

Project

DDH Q1

DDH Total

Holes

Metres

Holes

Metres

Retortillo-Santidad

12

735

12

735

Total

12

735

12

735

 

Table 1: Drilling Completed during 2012

 

Radiometric data for the resource drilling at Santidad confirms known mineralisation, however the closer spacing indicates less continuity than previously interpreted and it appears that some reduction in resources is likely.  A new resource will be calculated once assay results are received in April.  
The deposit is open to the north-west and drilling for additional resources can be considered, once access to this area is negotiated.  Notable intersections are summarised in Table 2, and all intersections in Appendix A.

 

 

 

Diamond drilling for geotechnical studies at Retortillo and Santidad was initiated in the current quarter.



Santidad

From

To

Thick

U3O8

(m)

(m)

(m)

(ppm)

SNR-211

26.0

31.0

5.0

423


33.0

34.0

1.0

336


37.0

39.0

2.0

604

SNR-280

0.0

19.0

19.0

313

SNR-287

10.0

14.0

4.0

2356

SNR-289

58.0

68.0

10.0

357


73.0

76.0

3.0

656

SNR-297

43.0

51.0

8.0

769

 

Table 2: Santidad - Significant Intersections at 200ppm cut-off.

 

 

Villares prospect:

 

This new prospect, is located approximately 7km north of Retortillo, and was first identified in the helicopter-borne radiometric and magnetic survey that Berkeley carried out in 2007.  Its potential was recently confirmed with a combination of ground radiometric survey and geological mapping, and by analysis of results from historical localised drilling by ENUSA.  Villares, and other anomalies in the Salamanca 1 area, have remained untested since Berkeley halted exploration in 2008, following onset of the GFC.

The drilling has been focussed in the Zona 19 and Zona 4 areas of the prospect, with several additional holes testing for possible continuity between other small surface anomalies.  Encouraging radiometric results in 23 of the 59 RC holes have been confirmed by the first batch of assays for 9 holes in the Zona 19 area.  They confirm the presence of shallow, high grade mineralisation in four of these holes, including: 15m at 1,524ppm U3O8 from 1m in VIR-001 and 9m at 2,363ppm U3O8 from 6m in VIR-007.  Results for these 4 holes are shown in Table 3.

 

Comparison of down hole radiometric results and chemical assays has been applied to the other 50 holes.  It indicates that significant, or anomalous, mineralisation has been intersected in 19 of these 50 holes for which only radiometric data is currently available.  A summary of all intersections is given in Appendix A.

 

At Zona 19 the assay and radiometric data has outlined mineralisation ranging from 25-75m in width over a strike length of about 300m.  The thickness ranges from 2-15m at depths from surface to 28m.   Uranium mineralisation is hosted within sediments, similar to the host rocks at Retortillo and Santidad, and is open along strike to the northwest and southeast. Drill access to test for extensions is under negotiation with landowners.

 

The down hole radiometric data from Zona 4 has outlined potential mineralisation up to 100m in width over a strike length of at least 300m.  The thickness ranges from 2-25m at a depth of 5-50m.  However, whilst most radiometric grades within this 300m long zone appear to be >200ppm U3O8, the variable relationship between assays and radiometrics at Zona 19 indicates that assay data is needed to properly gauge their true significance.

 

These initial results confirm the presence of shallow high grade mineralisation at the Villares prospect and highlight the potential to identify additional uranium resources in outcropping and covered areas in proximity to the Retortillo and Santidad deposits.  Further drilling is planned to test the additional targets identified.

 

 



Villares

From

To

Thick

U3O8

(m)

(m)

(m)

(ppm)

VIR-001

1.0

16.0

15.0

1,524


25.0

28.0

3.0

612

VIR-003

2.0

5.0

3.0

312


9.0

11.0

2.0

1,990

VIR-007

6.0

15.0

9.0

2,363

VIR-009

4.0

8.0

4.0

857


19.0

22.0

3.0

1,299

 

Table 3: Villares RC Drilling - Significant Intersections, 200ppm cut-off

 

 

Metallurgical Test work and Project Engineering:

 

The program of test work initiated in the December quarter, on a representative 4.7 tonne sample from Retortillo, was continued at the Mintek laboratories in Johannesburg. It includes:

 

Ø Bench scale comminution tests;

Ø ISO-pH tests;

Ø Diagnostic assay and agglomerate acid cure tests;

Ø Geomechanical tests:

Ø 6m column tests; and

Ø Solvent extraction test work through to ADU precipitation and analysis.

 

The program is well advanced and is targeted for completion in the June quarter.  Nine column tests are in progress and although early results are encouraging with respect to recovery and reagent consumption, firm conclusions cannot be drawn until column residues are analysed.  Upgrading of the hydrogeological model to provide a 3D transitional regime was continued, and the geotechnical model is being advanced to a final design status.  Completion of both models is targeted for completion in the June quarter.

 

CORPORATE

 

On 27 April the board completed the appointment of Ian Middlemas as Non-executive Chairman and Robert Behets as a Non-Executive Director of the Company.  These appointments will significantly strengthen the board's corporate and technical capacity following the departure of Mr Brendan James as Managing Director.

 

A full review of the Company's activities in Spain will be undertaken during the next quarter following the introduction of the new board members.

 

 

The information in this announcement that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Craig Gwatkin, who is a Member of The Australian Institute of Mining and Metallurgy and is an employee of Berkeley Resources Limited.  Mr. Gwatkin has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'.  Mr. Gwatkin consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.



 

Appendix A: All assayed Drill Intersections

Santidad RC Drilling


           







Drill Intersections  > 200ppm U3O8

Hole ID

Easting

Northing

Elev.

Depth

Azim

Dip

From

To

Thick

U3O8


(m)

(m)

(m)

(m)

(º)

(º)

(m)

(m)

(m)

(ppm)

SNR-208

716867

4522455

766.0

70.0

0

-90

33.0

34.0

1.0

205








44.0

45.0

1.0

320








48.0

53.0

5.0

240

SNR-209

716844

4522411

764.0

50.0

0

-90

No significant intersection

SNR-210

716890

4522285

768.0

52.0

0

-90

No significant intersection

SNR-211

716820

4522367

771.0

50.0

0

-90

26.0

31.0

5.0

423








33.0

34.0

1.0

336








37.0

39.0

2.0

604

SNR-212

716913

4522221

768.0

51.0

0

-90

No significant intersection

SNR-213

716778

4522394

776.0

67.0

0

-90

24.0

33.0

9.0

247








50.0

51.0

1.0

210

SNR-214

716960

4522203

758.0

40.0

0

-90

No significant intersection

SNR-215

717006

4522291

764.0

40.0

0

-90

No significant intersection

SNR-216

716983

4522247

758.0

40.0

0

-90

No significant intersection

SNR-217

717174

4522180

762.0

55.0

0

-90

21.0

23.0

2.0

272

SNR-218

717039

4522138

765.0

40.0

0

-90

No significant intersection

SNR-219

717060

4522178

761.0

40.0

0

-90

No significant intersection

SNR-220

717081

4522218

756.0

60.0

0

-90

No significant intersection

SNR-221

717121

4522078

770.0

50.0

0

-90

No significant intersection

SNR-222

717081

4522218

756.0

60.0

0

-90

No significant intersection

SNR-223

717146

4522020

771.0

52.0

0

-90

No significant intersection

SNR-224

717225

4522063

768.0

50.0

0

-90

28.0

29.0

1.0

235

SNR-225

717202

4522018

764.0

52.0

0

-90

No significant intersection

SNR-226

717287

4522287

749.0

56.0

0

-90

No significant intersection

SNR-227

716937

4522373

754.0

50.0

0

-90

No significant intersection

SNR-228

717193

4522216

758.0

46.0

0

-90

No significant intersection

SNR-229

716913

4522329

760.0

40.0

0

-90

No significant intersection

SNR-230

717249

4522107

768.0

56.0

0

-90

27.0

28.0

1.0

200

SNR-231

717030

4522335

746.0

38.0

0

-90

No significant intersection

SNR-232

717250

4522750

736.2

64.0

0

-90

No significant intersection

SNR-233

717104

4522262

750.0

35.0

0

-90

No significant intersection

SNR-234

717037

4522537

751.0

60.0

0

-90

No significant intersection

SNR-235

717301

4522450

726.6

55.0

0

-90

No significant intersection

SNR-236

717491

4522742

729.1

60.0

0

-90

No significant intersection

SNR-237

717756

4522503

720.8

60.0

0

-90

No significant intersection

SNR-238

717502

4522493

722.1

64.0

0

-90

No significant intersection

SNR-239

717498

4522243

758.1

67.0

0

-90

49.0

52.0

3.0

266

SNR-240

717750

4522250

732.9

60.0

0

-90

No significant intersection

SNR-241

717800

4521795

720.2

55.0

0

-90

No significant intersection

SNR-242

717746

4522002

732.6

54.0

0

-90

No significant intersection

SNR-243

717470

4521990

746.9

70.0

0

-90

No significant intersection

SNR-244

717271

4522040

763.7

70.0

0

-90

No significant intersection

SNR-245

717422

4521899

743.6

70.0

0

-90

No significant intersection

SNR-246

717249

4521990

758.1

70.0

0

-90

No significant intersection

SNR-247

717378

4521817

734.0

40.0

0

-90

No significant intersection

SNR-248

717223

4521950

754.6

70.0

0

-90

No significant intersection

SNR-249

715874

4523145

726.1

75.0

0

-90

No significant intersection

SNR-250

715906

4523303

733.8

94.0

0

-90

50.0

56.0

6.0

265








63.0

64.0

1.0

808








77.0

79.0

2.0

272








87.0

88.0

1.0

266

SNR-251

715896

4523189

726.0

70.0

0

-90

No significant intersection

SNR-252

715885

4523271

734.9

80.0

0

-90

16.0

18.0

2.0

1441








36.0

39.0

3.0

467








51.0

52.0

1.0

218








60.0

61.0

1.0

218








65.0

66.0

1.0

386

SNR-253

715923

4523131

725.4

70.0

0

-90

No significant intersection

SNR-254

715857

4523231

734.3

80.0

0

-90

11.0

14.0

3.0

200








41.0

42.0

1.0

222

SNR-255

715838

4523387

745.0

76.0

0

-90

No significant intersection

SNR-256

715816

4523340

746.6

70.0

0

-90

14.0

26.0

12.0

257








32.0

38.0

6.0

209

SNR-257

715917

4523081

729.2

30.0

0

-90

No significant intersection

SNR-258

715792

4523300

747.6

64.0

0

-90

No significant intersection

SNR-259

715947

4523051

735.5

40.0

0

-90

No significant intersection

SNR-260

715766

4523258

749.1

82.0

0

-90

65.0

66.0

1.0

318

SNR-261

715961

4523100

729.6

43.0

0

-90

No significant intersection

SNR-262

716063

4523063

745.4

40.0

0

-90

21.0

23.0

2.0

334

SNR-263

715955

4523165

726.2

70.0

0

-90

No significant intersection

SNR-264

716026

4523117

738.7

40.0

0

-90

7.0

11.0

4.0

214








15.0

17.0

2.0

565

SNR-265

715995

4523201

729.1

70.0

0

-90

24.0

25.0

1.0

301

SNR-266

716009

4523182

732.1

46.0

0

-90

No significant intersection

SNR-267

716038

4523022

743.7

50.0

0

-90

10.0

11.0

1.0

200

SNR-268

715985

4523141

732.5

40.0

0

-90

No significant intersection

SNR-269

715987

4523036

739.5

52.0

0

-90

25.0

26.0

1.0

213

SNR-270

716157

4523035

752.5

40.0

0

-90

No significant intersection

SNR-271

716015

4522966

753.8

90.0

0

-90

11.0

15.0

4.0

200








57.0

58.0

1.0

200








72.0

73.0

1.0

205

SNR-272

716136

4522997

756.7

40.0

0

-90

No significant intersection

SNR-273

715694

4523339

763.2

65.0

0

-90

No significant intersection

SNR-274

716500

4523375

730.5

60.0

0

-90

No significant intersection

SNR-275

715998

4523503

743.1

61.0

0

-90

No significant intersection

SNR-276

716501

4523500

748.1

60.0

0

-90

No significant intersection

SNR-277

716241

4523499

752.7

60.0

0

-90

No significant intersection

SNR-278

716625

4523375

736.1

60.0

0

-90

No significant intersection

SNR-279

716153

4522901

770.2

60.0

0

-90

No significant intersection

SNR-280

716253

4522990

755.0

52.0

0

-90

0.0

19.0

19.0

313

SNR-281

716225

4522939

763.0

50.0

0

-90

No significant intersection

SNR-282

716399

4522936

752.4

50.0

0

-90

No significant intersection

SNR-283

716479

4522895

749.0

46.0

0

-90

No significant intersection

SNR-284

716374

4522895

754.5

50.0

0

-90

No significant intersection

SNR-285

716197

4522894

770.4

50.0

0

-90

No significant intersection

SNR-286

716449

4522847

757.2

50.0

0

-90

5.0

8.0

3.0

207








12.0

14.0

2.0

223

SNR-287

716340

4522853

762.7

61.0

0

-90

10.0

14.0

4.0

2356








48.0

50.0

2.0

1434

SNR-288

716661

4522690

752.5

50.0

0

-90

No significant intersection

SNR-289

716429

4522772

767.3

94.0

0

-90

58.0

68.0

10.0

357








73.0

76.0

3.0

656

SNR-290

716580

4522557

777.4

64.0

0

-90

30.0

37.0

7.0

213

SNR-291

716812

4522533

759.2

50.0

0

-90

12.0

13.0

1.0

229

SNR-292

716627

4522420

790.5

100.0

0

-90

No significant intersection

SNR-293

716742

4522414

779.0

67.0

0

-90

34.0

45.0

11.0

282








50.0

52.0

2.0

251

SNR-294

715270

4523790

774.0

55.0

0

-90

No significant intersection

SNR-295

715292

4523844

767.3

50.0

0

-90

No significant intersection

SNR-296

715252

4523760

779.3

58.0

0

-90

37.0

41.0

4.0

392








47.0

49.0

2.0

936

SNR-297

715347

4523749

773.5

60.0

0

-90

32.0

33.0

1.0

266








43.0

51.0

8.0

769

SNR-298

715335

4523707

779.5

55.0

0

-90

24.0

26.0

2.0

567

SNR-299

715306

4523663

786.1

66.0

0

-90

30.0

31.0

1.0

284








58.0

59.0

1.0

251

SNR-300

715546

4523596

760.9

60.0

0

-90

No significant intersection

SNR-301

715523

4523551

765.0

60.0

0

-90

No significant intersection

SNR-302

715499

4523507

772.0

60.0

0

-90

No significant intersection

SNR-303

715544

4523483

769.6

50.0

0

-90

No significant intersection

SNR-304

715590

4523572

758.1

55.0

0

-90

3.0

8.0

5.0

296








16.0

20.0

4.0

201








23.0

24.0

1.0

245

SNR-305

715655

4523481

760.5

57.0

0

-90

29.0

30.0

1.0

859








41.0

43.0

2.0

211

SNR-306

715632

4523437

767.2

60.0

0

-90

11.0

16.0

5.0

271








21.0

22.0

1.0

535








36.0

38.0

2.0

270

SNR-307

715609

4523393

773.3

66.0

0

-90

No significant intersection

SNR-308

715744

4523434

754.8

70.0

0

-90

No significant intersection

 

 

Villares RC Drilling

 

 

 

 

 

 

 

Drill Intersections  > 200ppm U3O8

Hole ID

Easting

Northing

Elev.

Depth

Azim

Dip

From

To

Thick

U3O8


(m)

(m)

(m)

(m)

(º)

(º)

(m)

(m)

(m)

(ppm)

VIR-001

718548

4527388

711.8

58.0

0

-90

1.0

16.0

15.0

1524








25.0

28.0

3.0

612

VIR-002

718568

4527433

712.0

50.0

0

-90

No significant intersection

VIR-003

718510

4527405

710.7

50.0

0

-90

2.0

5.0

3.0

312








9.0

11.0

2.0

1990

VIR-004

718528

4527454

709.6

50.0

0

-90

No significant intersection

VIR-005

718527

4527339

715.3

50.0

0

-90

No significant intersection

VIR-006

718478

4527352

715.5

50.0

0

-90

No significant intersection

VIR-007

718638

4527337

714.3

50.0

0

-90

6.0

15.0

9.0

2363

VIR-008

718655

4527384

714.2

50.0

0

-90

No significant intersection

VIR-009

718618

4527304

716.0

46.0

0

-90

4.0

8.0

4.0

857








19.0

22.0

3.0

1299

 

  

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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