TIDMBKY
RNS Number : 8420F
Berkeley Resources Limited
30 April 2014
BERKELEY RESOURCES LIMITED
AIM RELEASE | 30 APRIL 2014 | ASX/AIM:BKY
MARCH 2014 QUARTERLY REPORT
Berkeley Resources Limited ('Berkeley' or the 'the Company') is
pleased to present its quarterly report for the period ended 31
March 2014. The Company's primary focus during the period continued
to be the advancement of the Salamanca Project located in Spain.
Highlights during and subsequent to the end of the quarter
include:
-- Exploitation Concession ('Mining Licence') for Retortillo granted by Regional Government:
Ø Valid for an initial period of 30 years, renewable for two
further periods of 30 years;
Ø Covers an area of 25.2km(2) and includes the entire area
containing the Retortillo deposit;
Ø Retortillo deposit forms part of the integrated Salamanca
Project and is the first resource from which production is
scheduled to commence; and
Ø With the grant of Mining Licence, the approval processes
associated with other key permits, including the Initial
Authorisation of the process plant as a radioactive facility and
the Exceptional Authorisation for Land Use (application for
reclassification from rural to industrial use) of the affected
surface land area at Retortillo, may now be finalised.
-- Finalisation of the Scope of Work for the Salamanca Project
Definitive Feasibility Study ('DFS'):
Ø Key areas of focus will include resource infill drilling
programs, further metallurgical testwork programs, including
additional six metre column leach work, development of a Geo-Met
model which will incorporate additional geological and
metallurgical parameters into the resource block model to support
metallurgical process modelling and mine planning and optimisation,
and enhanced design of the project infrastructure and site
facilities; and
Ø The Company will commence work programs for key inputs to the
DFS, including metallurgical testwork and hydrogeological studies,
during the current quarter.
-- Planning for the next phase of drilling at Zona 7 finalised:
Ø Previous drilling program at Zona 7 recorded significant high
grade intersections at shallow depths and essentially doubled the
strike extent of the mineralised zone. Better intercepts included
29 metres @ 3,391 ppm U(3) O(8) , 17 metres @ 1,260 ppm U(3) O(8) ,
15 metres @ 1,392 ppm U(3) O(8) , 25 metres @ 683 ppm U(3) O(8) ,
and 13 metres @ 1,161 ppm U(3) O(8) ;
Ø Current drill program will comprise approximately 600 metres
of diamond core and 2,500 metres of reverse circulation drilling.
The program has been designed to close the existing drill pattern
down to a notional 100 metre by 100 metre pattern to facilitate the
estimation of a revised Inferred Mineral Resource for Zona 7;
and
Ø Drilling will commence in May.
Enquiries: Robert Behets
Berkeley Resources
+61 8 9322 6322
John Prior/ Huw Jeremy - Nomad & Broker
Numis Securities
+44 (0) 207 260 1000
OPERATIONS
Berkeley Resources Limited ('Berkeley' or 'the Company') is a
uranium exploration and development company with a quality resource
base in Spain. Berkeley is currently focused on advancing its
wholly owned flagship Salamanca Project.
Salamanca Project
Berkeley's flagship Salamanca Project comprises the Retortillo,
Alameda and Gambuta deposits, plus a number of other Satellite
deposits located in western Spain.
Pre-Feasibility Study
In September 2013, the Company completed a Preliminary
Feasibility Study ('PFS') on the integrated development of
Retortillo and Alameda, which clearly demonstrated the Salamanca
Project's potential to support a significant scale, long life
uranium mining operation (refer ASX announcement dated 26 September
2013).
Using only the current Mineral Resource Estimates ('MRE') for
Retortillo and Alameda, which total 34.5 million pounds U(3) O(8)
(36.9 million tonnes at 424 ppm; 200 ppm U(3) O(8) cut-off grade),
as a base case scenario, the Project can support an average annual
production of 3.3 million pounds of U(3) O(8) during the seven
years of steady state operation and 2.7 million pounds of U(3) O(8)
over a minimum eleven year mine life. There is strong potential to
increase the production profile and/or mine life through the
exploitation of additional resources held by the Company (totalling
27.1 million pounds U(3) O(8) ) and with ongoing exploration
work.
The PFS was based on open pit mining, heap leaching using on-off
leach pads, a centralised process plant at Retortillo, and a remote
ion exchange operation at Alameda, with loaded resin trucked to the
centralised plant for final extraction and purification. The open
pits are shallow (maximum depth of 135m) with low strip ratios
(average 1:2.1 ore to waste for the Project over the life of mine).
During steady state operation the annual ore processing rate is 5.5
million tonnes. Operating costs (C1 cash costs) average US$24.60
per pound U(3) O(8) over the life of mine.
The initial capital cost (nominally +/- 20% accuracy) for the
Project is estimated at US$95.1 million. This cost is inclusive of
all mine, processing, infrastructure and indirect costs required to
develop and commence production at Retortillo. A further US$74.4
million of capital, incurred in the second year of production, is
required to develop Alameda and achieve steady state operation. The
Project's capital cost reflects the excellent existing
infrastructure, use of heap leaching as the preferred processing
route, and the favoured mining contractor scenario (no mining fleet
capital expenditure).
Key parameters used in the PFS included:
-- Ore Processing Rate 5,500,000 tonnes per annum (steady state)
-- Mining Cut-off Grades 105 ppm U(3) O(8) for Retortillo and 90
ppm U(3) O(8) for Alameda
-- Metallurgical Recovery 85%
-- Uranium Price US$65 per pound U(3) O(8)
-- Exchange Rate US$/EUR 1.28
Definitive Feasibility Study
A number of opportunities to further enhance the Project
economics through capital and operating cost reductions were
identified in the PFS. The Company has undertaken a comprehensive
review of the PFS with a view to assessing these opportunities and
defining key work programs to be incorporated into the final scope
of the Definitive Feasibility Study ('DFS').
Following completion of this review, the Scope of Work for the
DFS has been finalised. The key areas of focus will include:
-- Resource infill drilling programs aimed at upgrading the
classification of specific portions of the current Retortillo and
Alameda MRE's to the Measured category;
-- Further metallurgical testwork programs, including additional
column leach work (six metre columns), in combination with ion
exchange ('IX') at Alameda and solvent extraction ('SX') and
ammonium diuranate ('ADU') precipitation at Retortillo to generate
more detailed information relating to the pH and acid consumption
optimisation, design and sizing of the IX and SX units, and final
product specification;
-- Development of a Geo-Met model which will incorporate
additional geological and metallurgical parameters into the
resource block model to support metallurgical process modelling and
mine planning and optimisation;
-- Open pit optimisation, detailed mine design and production
scheduling using the upgraded MRE block models;
-- Enhanced design of the project infrastructure and site facilities;
-- Undertaking engineering studies to support capital and
operating cost estimates for the Project to a level of accuracy of
nominally +/-10%; and
-- Undertaking an evaluation of the various alternatives for
funding the development of the Project and the sale of future
uranium production (including uranium marketing and off-take
arrangements).
During the quarter, detailed work programs have been developed
for the metallurgical testwork to be conducted at the Mintek
mineral processing facility in Johannesburg and the hydrogeological
studies for both Retortillo and Alameda. These work programs will
commence during the current quarter.
Development of Geo-Met models for Retortillo and Alameda was
advanced during the quarter. The existing geological and
metallurgical databases were interrogated to assess the available
data and determine the key parameters to be captured and modelled.
Preliminary 3D models incorporating lithology, structure,
weathering and geochemical data for uranium, calcium, magnesium,
iron, sulphur and manganese, have been constructed. Metallurgical
data (actual or correlated) including uranium solubility, uranium
recovery, acid consumption etc. will now be incorporated. The 3D
Geo-Met models will be refined on an ongoing basis, with the
addition of new geological and metallurgical data and updated
interpretation.
The detailed design of the resource infill drilling programs,
which are aimed at upgrading the classification of specific
portions of the current Retortillo and Alameda MRE's to the
Measured category, has also been finalised.
Permitting
A major permitting milestone was achieved subsequent to the end
of the quarter with the grant of the Exploitation Concession
('Mining Licence') for Retortillo by the Regional Government of
Castilla and León (refer ASX announcement dated 24 April 2014). The
Retortillo deposit forms part of the Salamanca Project and is the
first resource from which production is scheduled to commence.
The grant of the Mining Licence for Retortillo is a major
milestone for the Company and follows the approval of Exploitation
and Reclamation and Closure Plans for the proposed mining operation
submitted by Berkeley, and the completion of a number of studies
and technical review sessions with relevant government agencies.
The granting of the Mining Licence has also taken into account the
prerequisite approval of the Company's Environmental and Social
Impact Assessment ('ESIA') by the environmental authorities (the
Environmental Licence for Retortillo was awarded in October 2013),
and the favourable recommendation report issued by the Nuclear
Safety Council.
The Mining Licence is valid for an initial period of 30 years
and may be renewed for two additional periods of 30 years. It
covers an area of 25.2km(2) and includes the entire area containing
the Retortillo Mineral Resource Estimate.
With the grant of the Mining Licence, the approval processes
associated with other key permits including the Initial
Authorisation of the process plant as a radioactive facility and
the Exceptional Authorisation for Land Use (application for
reclassification from rural to industrial use) of the affected
surface land area at Retortillo, may now be finalised.
The documents required for the next phase of permitting at
Alameda, including the Exploitation Plan, Reclamation and Closure
Plans, and the ESIA were completed during the quarter and will be
submitted to the relevant authorities during the current quarter.
The Environmental Scoping Document ('ESD') will also be
re-submitted having been updated to incorporate the latest results
from the PFS and inputs from the granting of the Environmental and
Mining Licenses for Retortillo.
Exploration
No drilling was completed during the quarter however, the
planning for the next phase of drilling at Zona 7 was
finalised.
Zona 7 is located approximately 10 kilometres to the northwest
of the proposed location of the centralised processing plant at
Retortillo and currently hosts an Inferred Mineral Resource
Estimate ('MRE') of 3.9 million tonnes averaging 414 ppm U(3) O(8)
for a contained 3.6 million pounds of U(3) O(8) at a lower cut-off
grade of 200 ppm U(3) O(8) (refer ASX June 2012 Quarterly
Report).
Assay results returned from an 18 hole reverse circulation
('RC') drilling program in August 2013 confirmed that the Zona 7
mineralisation extends a further 1,200m to the southwest of the
current resource area. The drilling, which was carried out on an
approximately 400m by 100m grid, essentially doubled the strike
extent of the mineralised zone and it remains open. Significant
high grade intersections were recorded at shallow depths (from 9m
to a maximum depth of 84m), with thicknesses up to 29m. Better
intercepts included 29m @ 3,391 ppm U(3) O(8) , 17m @ 1,260 ppm
U(3) O(8) , 15m @ 1,392 ppm U(3) O(8) , 25m @ 683 ppm U(3) O(8) and
13m @ 1,161 ppm U(3) O(8) (refer ASX announcement dated 7 August
2013).
The current Zona 7 program, which will comprise approximately
600m of diamond core and 2,500m of reverse circulation ('RC')
drilling, is aimed at infilling the zone of mineralisation defined
by the 2013 drilling and extending it further to the south-west.
The program has been designed to close the existing drill pattern
down to a notional 100m by 100m pattern to facilitate the
estimation of a revised Inferred Mineral Resource for the prospect.
The drilling will be conducted during May and June.
CORPORATE
At 31 March 2014, the Company had cash reserves of A$21.5
million.
In April 2013, Shareholders approved Berkeley's Performance
Rights Plan. The Plan is designed to reward superior performance
based on materially improved Company performance in terms of growth
in the value of the Company and resulting increases in Shareholder
value. The Company granted 490,000 Performance Share Rights to
employees and consultants of the Company in March 2014.
Competent Persons Statement
The information in this Report that relates to Exploration
Results and Mineral Resources is based on information compiled by
Craig Gwatkin, who is a Member of The Australian Institute of
Mining and Metallurgy and was an employee of Berkeley Resources
Limited at the time of initial disclosure. 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. This information was prepared and first disclosed
under the JORC Code 2004. It has not been updated since to comply
with the JORC Code 2012 on the basis that the information has not
materially changed since it was last reported.
The information in this Report that relates to the
Pre-Feasibility Study is based on information compiled by Neil
Senior of SENET (Pty) Ltd. Mr. Senior is a Fellow of The South
African Institute of Mining and Metallurgy and 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. Senior consents
to the inclusion in this Report of the matters based on his
information in the form and context in which it appears. This
information was prepared and first disclosed under the JORC Code
2004. It has not been updated since to comply with the JORC Code
2012 on the basis that the information has not materially changed
since it was last reported.
Forward Looking Statement
Statements regarding plans with respect to the Company's mineral
properties are forward-looking statements. There can be no
assurance that the Company's plans for development of its mineral
properties will proceed as currently expected. There can also be no
assurance that the Company will be able to confirm the presence of
additional mineral deposits, that any mineralisation will prove to
be economic or that a mine will successfully be developed on any of
the Company's mineral properties.
Appendix 1: Summary of Mining Tenements
As at 31 March 2014, the Company had an interest in the
following tenements:
Location Tenement Name Interest Status
------------- ----------------------------- --------- --------
Spain
Salamanca D.S.R Salamanca 28 (Alameda) 100% Granted
D.S.R Salamanca 29 (Villar) 100% Granted
P.I. Abedules 100% Granted
P.I. Abetos 100% Granted
P.I. Alcornoques 100% Granted
P.I. Alisos 100% Granted
P.I. Bardal 100% Granted
P.I. Barquilla 100% Granted
P.I. Berzosa 100% Granted
P.I. Campillo 100% Granted
P.I. Castaños 2 100% Granted
P.I. Ciervo 100% Granted
P.I. Dehesa 100% Granted
P.I. El Águlia 100% Granted
P.I. Espinera 100% Granted
P.I. Horcajada 100% Granted
P.I. Mailleras 100% Granted
P.I. Mimbre 100% Granted
P.I. Oñoro 100% Granted
P.I. Pedreras 100% Granted
P.I. Alimoche 100% Pending
P.I. El Vaqeril 100% Pending
P.I. Halcón 100% Pending
Cáceres P.I. Almendro 100% Granted
P.I. Ibor 100% Granted
P.I. Olmos 100% Granted
Badajoz P.I Don Benito Este - 100% Pending
U
P.I Don Benito Este - 100% Pending
C
P.I Don Benito Oeste 100% Pending
- U
P.I Don Benito Oeste 100% Pending
- C
Ciudad Real P.I Damkina Fraccion 100% Granted
1
P.I Damkina Fraccion 100% Granted
2
P.I Damkina Fraccion 100% Granted
3
No tenements were acquired or disposed of during the quarter
ended 31 March 2014. There were no changes to beneficial interest
in any mining tenements due to Farm-in or Farm-out agreements. No
beneficial interest in Farm-in or Farm-out agreements were acquired
or disposed during the quarter.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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