December 2014 Quarterly Report

BERKELEY RESOURCES LIMITED

AIM RELEASE | 30 JANUARY 2015  | ASX/AIM:BKY

DECEMBER 2014 QUARTERLY REPORT

Berkeley Resources Limited ('Berkeley' or the 'the Company') is pleased to present its quarterly report for the period ended 31 December 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:

· Substantial increase in Zona 7 Resource:

Ø Zona 7 Mineral Resource Estimate ('MRE') increased to 30.1 Mlbs U3O8 (previously 3.6 Mlbs);

Ø Average grade of the MRE increased by 42% to 589 ppm U3O8;

Ø 90% of the MRE within 50 metres of surface;

Ø Salamanca Project total resource base increased by 43% to 88.2 Mlbs U3O8;

Ø The successful exploration drilling at Zona 7 highlights the significant exploration and resource growth potential of the broader Salamanca Project;

· Scoping Study commenced to determine the optimum integration of Zona 7 with the development of Retortillo and Alameda, thereby potentially increasing the scale and/or mine life of the Project;

· Salamanca Project Definitive Feasibility Study ('DFS') advanced:

Ø The DFS is currently focussed on the integrated development of Retortillo and Alameda however, Zona 7 will be incorporated following completion of the abovementioned Scoping Study;

Ø The resource infill drilling program at Retortillo, aimed at upgrading sections of the resource to the Measured category, was completed. The data obtained from this infill drilling program will form the basis for a revised MRE, which is anticipated to be completed in the current quarter;

Ø Metallurgical column leaching testwork for Retortillo was completed. Solvent extraction characterisation tests are now underway; and

Ø Permeability and hydraulic conductivity tests were completed at Retortillo. The results of these tests, along with the pumping tests completed in the previous quarter, are currently being used to update the Retortillo hydrogeological model.

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 high 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, Zona 7 and Gambuta 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 announcement dated 26 September 2013).

Using only the current Mineral Resource Estimates ('MRE') for Retortillo and Alameda, which total 34.5 million pounds U3O8 (36.9 million tonnes at 424 ppm; 200 ppm U3O8 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 U3O8 during the seven years of steady state operation and 2.7 million pounds of U3O8 over a minimum eleven year mine life.

Following the updated MRE for the Zona 7 deposit which totalled 30.1 Mlbs U3O8 in November, the Company has commenced a Scoping Study to determine the optimum integration of Zona 7 with the development of Retortillo and Alameda, thereby potentially increasing the production rate and/or mine life of the Project.

Zona 7 - Mineral Resource Estimate

Berkeley announced an updated MRE for Zona 7, the largest of the Retortillo Satellite Deposits and part of the Salamanca Project in Spain, in November 2014 (see Announcement 26 November 2014).

This Inferred MRE was estimated at 23.2 million tonnes averaging 589 ppm U3O8 for a contained 30.1 million pounds of U3O8 at a lower cut-off grade of 200 ppm U3O8 (previously 3.6 Mlbs).

The updated MRE incorporates the drilling results from the successful 2013 and 2014 campaigns which essentially doubled the strike length of the Zona 7 mineralisation, extending it by 1,200 metres to the southwest. Significant shallow, high grade intersections were recorded and the mineralisation remains open along the north-western margin and along strike. Both areas will be targeted in subsequent drilling campaigns.

Given the significant scale, high grade and shallow depth of the Zona 7 deposit, the Company has advanced its evaluation to the Scoping Study stage. A Scoping Study has commenced with completion scheduled for the March quarter of 2015.

As Zona 7 is located within 10 kilometres of the proposed centralised processing plant at Retortillo, there is scope to integrate it with the planned development of Retortillo and Alameda, and potentially increase the level of production and/or mine life of the Salamanca Project.

Drilling

Three phases of drilling, totalling 215 holes for 12,706 metres, have been carried out at Zona 7. The initial phase relates to historical drilling conducted during the period from the 1960's to 1980's by Junta de Energía Nuclear ('JEN'), a Spanish state run company. The second phase of drilling was conducted in 2007 and 2008 by Berkeley. A third phase of drilling was completed during 2013 and 2014.

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 in late 2012. An 18 hole, 1,128 metre reverse circulation ('RC') drill program was subsequently completed in mid-2013 to test this priority target. This drilling, which was carried out on an approximately 400 metre by 100 metre grid, resulted in the mineralised zone being extended a further 1,200 metres to the southwest of the previous resource area. The 2014 drilling program, which comprised 45 RC holes for 2,923 metres and five diamond core ('DD') holes for 391 metres, was aimed at infilling the Zona 7 extension on a notional 100 metre by 100 metre grid.

Initial assay results from the 2014 program were reported in August 2014 (refer announcement dated 18 August 2014), with the results from a further 29 RC holes reported during the quarter (refer announcement dated 10 November 2014).

Select intercepts from the additional 29 RC holes reported during the quarter included:

The mineralisation intersected in the 2014 infill holes showed good continuity of both thickness and grade exists between the previous broader spaced drill holes within the Zona 7 extension. Significant high grade intersections were recorded at shallow depths (from surface to a maximum depth of 73 metres), with thicknesses up to 25 metres.

Mineral Resource Estimate

The MRE for Zona 7 was updated, incorporating additional drilling and sampling information from the 2013 and 2014 drilling campaigns. The MRE was classified as Inferred based on the guidelines recommended in the JORC Code (2012).

The MRE is reported at a lower cut-off grade of 200 ppm U3O8 (Table 1), along with estimates showing the range of U3O8 cut-off grades that would span the range applicable to open pit mining (Table 2).

Table 1: Zona 7 - Mineral Resource Estimate

All figures are rounded to reflect appropriate levels of confidence. Apparent differences occur due to rounding.

Table 2: Zona 7 - Grade Tonnage Table

Zona 7 - Scoping Study

Following completion of the updated MRE, the Company has commenced a Scoping Study to determine the optimum integration of Zona 7 with the development of Retortillo and Alameda, thereby potentially increasing the level of production and/or mine life of the Project.

The key considerations for the Scoping Study will be preferred mining and processing route, scale, throughput rate, mine life, infrastructure, community and environmental impacts.

The scope of work includes initial metallurgical testwork on representative samples of weathered and fresh ore, including bond crushability and bond abrasion tests, mineralogy, diagnostic leach tests, stacking tests and one metre column leach tests at different crush sizes. The bulk sample has been transported to Mintek's laboratory in Johannesburg and is currently being prepared for the testwork program which will be run during the March quarter. Hydrogeological, and geotechnical studies will also be undertaken.

Retortillo/Alameda - Definitive Feasibility Study

The DFS for the Project commenced in 2014, with the key areas of focus including:

· 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 and hydrogeological studies for both sites, were advanced.

Drilling

An infill drilling program at Retortillo, 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, was completed during the quarter.

The program was designed to close the existing drill pattern down to a notional 35 metre by 35 metre pattern within the areas targeted while the core obtained from the diamond ('DD') drilling will facilitate enhanced geological and structural understanding of the deposit.

Following completion of the RC component of the program in September, the DD program was completed in November. In total, 69 RC holes for 4,693 metres and four DD holes for 291 metres were drilled.

The data obtained from this infill drilling program will form the basis for a revised MRE, which is anticipated to be completed in the current quarter.

Metallurgical Testwork

The metallurgical testwork program being undertaken for three master composite samples, representative of various mining phases at Retortillo, continued during the quarter at the Mintek facilities in Johannesburg. The six metre column leaching testwork was completed and solvent extraction characterisation tests are now underway. Whilst final results are pending, the leaching characteristics observed are generally in line with expectation.

Preparation for the master composite samples for Alameda was completed during the quarter however, the six metre column leaching testwork remain on hold pending completion of the higher priority Zona 7 Scoping Study.

Hydrogeology

In addition to the pumping tests completed in the previous quarter, permeability and hydraulic conductivity tests were carried out using the four DD holes at Retortillo in the December quarter. Data obtained from these tests are currently being used to update the Retortillo hydrogeological model.

Permitting

Following the grant of the Mining Licence in 2014, the approval processes associated with other key permits including the Initial Authorisation of the process plant as a radioactive facility and the Authorisation for Exceptional Use of the Land (application for reclassification from rural to industrial use) of the affected surface land area at Retortillo, continued to be the focus of permitting related activities during the quarter.

All documentation required for the Initial Authorisation of the process plant as a radioactive facility, including the Radiological Analytical Study and Pre-Operational Surveillance Plan have been submitted by Berkeley and reviewed by technical staff within the Nuclear Safety Council ('NSC'). The Company has subsequently provided responses to all queries/requests for clarification put forward by the NSC technical staff. The Initial Authorisation is now pending review and approval of the documentation by the NSC Board.

The Company submitted additional documentation pertaining to the application for Exceptional Use of the Land at Retortillo to the municipalities of Retortillo and Villavieja de Yeltes in November, as requested by the Commission of Environment and Urbanism of Salamanca. A number of follow-up meetings have been held with the relevant authorities and Berkeley's application will be placed on the agenda of a meeting of the Commission of Environment and Urbanism of Salamanca (the substantive authority) in the coming months.

The permitting process for Alameda continued during the quarter, with the Exploitation Plan and Rehabilitation and Closure Plan being submitted to the Ministry of Industry of the Central Government in October. The Environmental Scoping Document was also submitted to the Ministry of Industry in December and an introductory meeting held with the Environment Department of the Central Government following the submission. All key documentation associated with the Initial Authorisation of the processing facilities at Alameda as a radioactive facility is currently being prepared.

A stand-alone permitting process is required for Zona 7 however, the substantive regulatory authorities are the same as those involved in the Retortillo process. The documents required to commence the Environmental and Mining Licence processes will be prepared and submitted following completion of the Zona 7 Scoping Study and initial Environmental and Radiological Protection baseline studies.

CORPORATE

At 31 December 2014, the Company had cash reserves of A$16.2 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 2014 Mineral Resources for Zona 7 is extracted from the report entitled 'Salamanca Project Total Resource Increased By 43% to 88.2 Mlbs U3o8 following Substantial Increase In Zona 7 Resource' dated 26 November 2014 and is available to view on Berkeley's website at www.berkeleyresources.com.au. The information in the original ASX Announcement that relates to the 2014 Mineral Resources for Zona 7 was based on information compiled by Malcolm Titley, a Competent Person who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Titley is employed by Maja Mining Limited, an independent consulting company. Mr Titley 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 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement.

The information in this report that relates to 2014 Exploration Results is extracted from the reports entitled 'Thick, High Grade Mineralisation Intersected at Zona 7' dated 18 August 2014 and 'Further Thick, High Grade Drill Intersections at Zona 7' dated 10 November 2014 which are available to view on Berkeley's website at www.berkeleyresources.com.au. The information in the original ASX Announcements that relate to the 2014 Exploration Results is based on information compiled by Robert Behets, a Competent Person who is a Fellow of The Australasian Institute of Mining and Metallurgy. Mr Behets is a holder of shares, options and performance rights in, and is a director of, Berkeley Resources Limited. Mr Behets 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 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement. The Company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement.

The information in this report that relates to earlier Exploration Results and Mineral Resources is extracted from Berkeley's ASX announcements dated 31 July 2012 (June 2012 Quarterly Report), 31 October 2012 (September 2012 Quarterly Report), 7 August 2013 and 26 September 2013 which are available to view on Berkeley's website at www.berkeleyresources.com.au. The information in the original ASX announcements was 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. 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 extracted from Berkeley's ASX announcement dated 26 September 2013 which is available to view on Berkeley's website at www.berkeleyresources.com.au. The information in the original ASX announcement was 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 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.

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. The information in relation to the Production Target that the Company is required to include in a public report in accordance with ASX Listing Rule 5.16 was included in the Company's June 2014 Quarterly Report released to the ASX on 24 July 2014.

The Company confirms that the material assumptions underpinning the PFS and Production Target referenced in the 26 September 2013 and 24 July 2014 releases 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 31 December 2014, the Company had an interest in the following tenements:

No tenements were acquired or disposed of during the quarter ended 31 December 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.