Major Milestones in Salamanca Uranium Project (7150Z)

TIDMBKY

RNS Number : 7150Z

Berkeley Resources Limited

19 January 2011

19th January 2011

MAJOR MILESTONES IN THE DEVELOPMENT OF THE SALAMANCA URANIUM PROJECT

Berkeley Resources Ltd ("Berkeley" or the "Company") is pleased to advise of two major milestones in the development of the Salamanca Uranium Project ("The Project").

As provided for in the Collaboration Agreement between Berkeley and Enusa Industrias Avanzades S.A. ("ENUSA") dated 29 January 2009 ("Collaboration Agreement"), the Board has approved the decision to progress to the exploitation phase.

In addition, the Company has arranged a fully underwritten capital raising of A$55 million, at A$1.70 per share, of which A$26 million is subject to shareholder approval.

The decision to exploit follows the submission of the Exploitation Plan to ENUSA on 18 November 2010 (refer to the ASX Announcement of 14 December 2010). Under the Collaboration Agreement, this decision triggers a sequence of actions essential to the development of the Salamanca Uranium Project:

-- Incorporation of a new joint venture company ("Newco") within 60 days (90% Berkeley with ENUSA retaining a 10% free carried interest) which will own and operate the Salamanca Uranium Project;

-- Submission of the Exploitation Plan to the Central Government of Spain;

-- Payment of EUR20 million (approximately A$26 million) to ENUSA within 90 days, in exchange for the transfer into Newco of the ENUSA owned elements of the Salamanca Uranium Project (the State Reserve Licences).

The Company has also entered into agreements with RBC Capital Markets ("RBC"), BMO Capital Markets ("BMO") and Dundee Securities Corporation whereby RBC and BMO have agreed to jointly underwrite an equity raising of A$55 million at a price of A$1.70 per share, via a placement to institutional investors (a separate announcement with further details on the placement has been released). These funds will be utilised to meet the cost of the EUR20 million payment to ENUSA, fund further feasibility steps that will include a 1,200 hour pilot plant operation, enable exploration drilling of high quality targets within the State Reserves and adjacent Berkeley tenements.

Acting Managing Director, Henry Horne said "These milestones are seminal events in the development of the Salamanca Uranium Project. They accelerate the permitting process, enable further optimisation including the commissioning of a pilot plant and provide the funding capacity to explore a new generation of exploration targets."

Enquiries - Acting Managing Director: Henry Horne Tel: +34 673 497 712

RBC Capital Markets: Martin Eales Tel: +44 20 7029 7881

This information is provided by RNS

The company news service from the London Stock Exchange

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