TIDMBKY
RNS Number : 1621N
Berkeley Resources Limited
24 July 2014
24 July 2014
ASX/AIM:BKY
BERKELEY RESOURCES LIMITED
JUNE 2014 QUARTERLY REPORT
Berkeley Resources Limited ('Berkeley' or the 'the Company') is
pleased to present its quarterly report for the period ended 30
June 2014. The Company's primary focus during the period continued
to be the advancement of the Salamanca Project located in Spain.
Highlights during the quarter include:
-- Exploitation Concession ('Mining Licence') for Retortillo granted by Regional Government:
o Valid for an initial period of 30 years, renewable for two
further periods of 30 years;
o Covers an area of 25.2km(2) and includes the entire area
containing the Retortillo deposit;
o Retortillo deposit forms part of the integrated Salamanca
Project and is the first resource from which production is
scheduled to commence; and
o 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.
-- Commencement of the Salamanca Project Definitive Feasibility Study ('DFS'):
o DFS focussed on the integrated development of Retortillo and
Alameda;
o A number of work programs providing key inputs to the DFS,
including detailed geological and structural mapping,
hydrogeological studies, metallurgical testwork, and preparations
for resource drilling at Retortillo, commenced during the
quarter.
-- 2014 drilling program at Zona 7 nearing completion:
o 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) ;
o 2014 drill program, comprising approximately 2,750 metres of
reverse circulation and 300 metres of diamond core drilling, is
aimed at infilling the zone of mineralisation delineated by the
prior year drilling and extending it further to the south-west. The
current program, which is nearing completion, 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 MRE for Zona 7.
Enquiries:
Robert Behets
Berkeley Resources
+61 8 9322 6322
John Prior / Paul Gillam - 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 ('the Project') comprises
the Retortillo, Alameda, Gambuta and Zona 7 deposits, plus a number
of other Satellite deposits located in western Spain.
The Company has completed a Preliminary Feasibility Study
('PFS') on the integrated development of Retortillo and Alameda,
which clearly demonstrated the 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 PFS showed that 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).
Definitive Feasibility Study
The Definitive Feasibility Study ('DFS') for the Project
commenced during the quarter following finalisation of the Scope of
Work.
The key areas of focus for the DFS 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 a number of work programs providing key
inputs to the DFS, including the resource infill drilling program
at Retortillo, the metallurgical testwork program, development of
Geo-Met models and hydrogeological studies for both sites, were
advanced.
Geology and Drilling
Following completion of the detailed design of the infill
drilling program for Retortillo, which is aimed at upgrading the
resource classification of the areas to be mined during the initial
two years of the PFS production schedule to the Measured category,
activities including land owner authorisation, site access and
drill site preparation were undertaken during the quarter.
The drilling program will comprise approximately 70 reverse
circulation ('RC') holes for 4,600m and four diamond core ('DD')
holes for 300m. The program has been designed to close the existing
drill pattern down to a notional 35m by 35m pattern within the
areas targeted while the core obtained from the DD drilling will
facilitate enhanced geological and structural understanding of the
deposit.
The RC component of the resource drilling program commenced at
Retortillo in mid-July.
A detailed geological and structural mapping exercise at
Retortillo was also completed by experts from the University of
Salamanca during the quarter. The outputs of the mapping exercise,
including a new 1:1,000 scale geological map, has resulted in an
improved understanding of the structural and stratigraphic controls
on uranium mineralisation at Retortillo (and the broader region
hosting the Retortillo Satellite deposits) and provided a detailed
geological framework for resource estimation, hydrogeological and
geotechnical studies.
Hydrogeology
Eight short (15m depth) piezometer holes were drilled at
Retortillo as part of the DFS hydrogeological program during the
quarter. The objective of the piezometer holes is to enable the
water flow in a small creek proximal to the proposed open pit to be
compared with water table in the surrounding areas. The piezometers
will also be used for pumping and tracer tests.
A geophysical survey (Electrical Resistivity Tomography, 'ERT')
was completed at Retortillo, with data collected on eight cross
sections and four long sections. The sections have highlighted the
main faults/fractures within the deposit and surrounding area. The
spatial location of the fault/fracture zones will be taken into
account when siting drainage boreholes around the proposed open
pit.
Independent consultant, FRASA, has commenced the process of
updating the three dimensional ('3D') hydrogeological model with
all new information from the additional hydrogeological
investigations being undertaken at Retortillo. The updated model
will be used to refine the water management system developed for
the site.
At Alameda, pumping tests were conducted in the north-western
and eastern areas of the site in order to confirm the hydraulic
conductivity within these areas and the capacity to produce a
sufficient water supply for the project. The data showed high
transmissivity in the northwest and lower transmissivity in the
east. The results are being used to update the hydrogeological
model for the site.
Metallurgical Testwork
Preparation for the three composite samples, representative of
various mining phases at Retortillo, is nearing completion and it
is anticipated that the six metre columns will be loaded with
agglomerated material and the testwork program will commence in
late July.
Permitting
A major permitting milestone was achieved during 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 process of obtaining all other permits necessary for the
development of Retortillo continued to advance during the
quarter.
The Environmental Scoping Document ('ESD')for Alameda and the
proposed power line to supply grid power to the site was
resubmitted to the relevant authorities during the quarter. The ESD
has been updated to incorporate the PFS results and inputs from the
granting of the Environmental and Mining Licenses for Retortillo.
The Company and its environmental consultants, MAGMA, subsequently
met with the authorities and presented an overview of the ESD in
early July.
Exploration - Zona 7
The next phase of drilling program at Zona 7 commenced in May
and was nearing completion at the time of this report.
Zona 7 is located approximately 10km 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).
The potential extension of Zona 7 to the southwest towards Las
Carbas was identified as a priority drill target following a review
of all available data for the regional tenements surrounding the
existing resources. An 18 hole, 1,133m RC drill program was
subsequently completed in mid-2013 to test this priority
target.
Assay results returned from this 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 comprises 38 RC holes for
approximately 2,750m and three DD holes for approximately 300m, 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 RC drilling component of the 2014 program was recently
completed, and the DD drilling will be concluded in early August.
Assay results are pending.
The data obtained from both the 2013 and 2014 drilling programs
will form the basis for an upgraded Inferred Mineral Resource for
Zona 7, anticipated to be completed in the December quarter.
CORPORATE
At 30 June 2014, the Company had cash reserves of A$20.2
million.
The Company continues to maintain a strong focus on cost control
across all areas of the business.
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.
Production Target
The Production Target stated in this Report is based on the
Company's Pre-Feasibility Study ('PFS') for the Salamanca Project
as released to the ASX on 26 September 2013, which included the
following material assumptions:
-- Minimum Life of Mine ('LOM') 11 years (including 7 years of steady state operation)
-- Mining Method Open pit for Retortillo and Alameda
-- Strip Ratios 1:2.6 for Retortillo and 1:1.8 Alameda (ore to
waste, averages over LOM)
-- Mining Cut-off Grades 105 ppm U(3) O(8) for Retortillo and 90
ppm U(3) O(8) for Alameda
-- Overall Pit Wall Slope Angles 35-45 degrees for Retortillo
and 35-55 degrees for Alameda
-- Processing Method Heap leaching using on-off leach pads at
Retortillo and Alameda, followed by uranium recovery and
purification by solvent extraction, ammonium diuranate
precipitation and calcination at Retortillo
-- Ore Processing Rates 2.2 million tonnes per annum for
Retortillo and 3.3 million tonnes per annum for Alameda during
steady state operation
-- Heap Leach Feed Grades 306 ppm U(3) O(8) for Retortillo and
322 ppm U(3) O(8) for Alameda (averages over LOM)
-- Metallurgical Recovery 85% for Retortillo and Alameda
-- Acid Consumption 18 kilograms per tonne for Retortillo and Alameda
-- Mining Costs US$14.50 per pound U(3) O(8) for Retortillo and
US$9.76 per pound U(3) O(8) for Alameda (average LOM C1
cash operating costs, assumes contract mining)
-- Processing Costs US$12.80 per pound U(3) O(8) for Retortillo
and US$10.41 per pound U(3) O(8) for Alameda (average LOM C1 cash
operating costs)
-- General and Administrative Costs US$2.03 per pound U(3) O(8)
for Retortillo and US$1.56 per pound U(3) O(8) for Alameda (average
LOM C1
cash operating costs)
-- Upfront Capital Costs US$95.1 million to deliver initial
production at Retortillo and a further US$74.4 million at Alameda
to
achieve steady state
-- Discount Rate 8%
-- Uranium Price US$65 per pound U(3) O(8)
-- Exchange Rate US$/EUR 1.28
The PFS and Production Target were based solely on the
Retortillo and Alameda Indicated Mineral Resources, being 14.4
million tonnes averaging 378 ppm U(3) O(8) for a contained 12.0
million pounds U(3) O(8) and 20.0 million tonnes averaging 455 ppm
U(3) O(8) for a contained 20.1 million pounds U(3) O(8)
respectively, at a lower cut-off grade of 200 ppm U(3) O(8) . The
PFS and Production Target do not incorporate any Inferred Mineral
Resources.
The Indicated Mineral Resources underpinning the Production
Target were prepared by a Competent Person in accordance with the
requirements in Appendix 5A (JORC Code). This information was first
disclosed on 26 September 2013 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 Competent Person Statement relating to the Indicated
Mineral Resources is above.
The Company confirms that the material assumptions underpinning
the PFS and Production Target referenced in the 26 September 2013
release continue to apply and have not materially changed.
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 30 June 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
E.C Retortillo-Santidad 100% Granted
I.P. Abedules 100% Granted
I.P. Abetos 100% Granted
I.P. Alcornoques 100% Granted
I.P. Alisos 100% Granted
I.P. Bardal 100% Granted
I.P. Barquilla 100% Granted
I.P. Berzosa 100% Granted
I.P. Campillo 100% Granted
I.P. Castaños 2 100% Granted
I.P. Ciervo 100% Granted
I.P. Dehesa 100% Granted
I.P. El Águlia 100% Granted
I.P. Espinera 100% Granted
I.P. Horcajada 100% Granted
I.P. Mailleras 100% Granted
I.P. Mimbre 100% Granted
I.P. Oñoro 100% Granted
I.P. Pedreras(Fractions 100% Granted
1 - 4)
I.P. Alimoche 100% Pending
I.P. El Vaqueril 100% Pending
I.P. Halcón 100% Pending
Cáceres I.P. Almendro 100% Granted
I.P. Ibor 100% Granted
I.P. Olmos 100% Granted
Badajoz I.P Don Benito Este - 100% Pending
U
I.P Don Benito Este - 100% Pending
C
I.P Don Benito Oeste 100% Pending
- U
I.P Don Benito Oeste 100% Pending
- C
Ciudad Real I.P Damkina Fraccion 100% Granted
1
I.P Damkina Fraccion 100% Granted
2
I.P Damkina Fraccion 100% Granted
3
Exploitation Concession for Retortillo-Santidad was granted
during the quarter ended 30 June 2014. No tenements were acquired
or disposed of during the quarter ended 30 June 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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