27th Sep 2007 10:30
Berkeley Resources Limited27 September 2007 BERKELEY RESOURCES LIMITED ANNUAL FINANCIAL REPORT 30 JUNE 2007 ABN 40 052 468 569 CORPORATE DIRECTORY Directors Share Registry Dr Robert Hawley - Chairman Australia Mr Matthew Syme - Managing Director Computershare Investor Services Pty Ltd Dr James Ross Level 2 Senor Jose Ramon Esteruelas 45 St Georges Terrace Mr Sean James Perth WA 6000 Telephone: +61 8 9323 2000 Company Secretary Facsimile: +61 8 9323 2033 Mr Shane Cranswick United Kingdom Registered Office Computershare Investor Services Plc Level 9, BGC Centre PO Box 82 28 The Esplanade The Pavillions Perth WA 6000 Bridgwater Road Australia Bristol BS99 7NH Telephone: +61 8 9322 6322 Telephone: +44 870 889 3105 Facsimile: +61 8 9322 6558 Stock Exchange Listings London Office Australia Office 2.20 Australian Securities Exchange Limited 18 Hanover Square Home Branch - Perth London W1S 1HX 2 The Esplanade United Kingdom Perth WA 6000 Telephone: +44 20 3008 4776 Facsimile: +44 20 3008 8601 United Kingdom London Stock Exchange - AIM 10 Paternoster Square Auditor London EC4M 7LS Stantons International Level 1 ASX/AIM Code 1 Havelock Street BKY - Fully paid ordinary shares West Perth WA 6005 Bankers Website Australia and New Zealand Banking Group Ltd www.berkeleyresources.com.au 77 St Georges Terrace Perth WA 6000 Email [email protected] DIRECTORS' REPORT 30 JUNE 2007 The Directors of Berkeley Resources Limited submit their report on theConsolidated Entity consisting of Berkeley Resources Limited ("Company" or "Berkeley" or "Parent") and the entities it controlled at the end of, or during,the year ended 30 June 2007 ("Consolidated Entity" or "Group"). Directors The names of Directors in office at any time during the financial year or sincethe end of the financial year are: Dr Robert Hawley Mr Matthew Syme Dr James Ross Senor Jose Ramon Esteruelas (appointed 16 November 2006) Mr Sean James (appointed 28 July 2006) Mr Ian Middlemas (resigned 16 November 2006) Unless otherwise disclosed, Directors held their office from 1 July 2006 untilthe date of this report. Current Directors and Officers Robert Hawley Non-Executive Chairman Qualifications - CBE, DSc, FRSE, FREng, Hon FIET, FIMechEng, FInstP Dr Hawley is based in London and has extensive technical qualifications andsubstantial expertise in the nuclear energy industry as well as broader publiccompany management. He was Chief Executive of British Energy Plc from 1995 to1997, Chief Executive of Nuclear Electric Plc from 1992 to 1996 and prior tothis enjoyed a long career in senior engineering and management positions withCA Parsons & Co Ltd, Northern Engineering Industries Plc and Rolls-Royce Plc. DrHawley has been Managing Director of CA Parsons & Co Ltd, Managing Director ofNorthern Engineering Industries Plc, a Director of Rolls-Royce Plc, Chairman ofTaylor Woodrow Plc, an Advisor Director of HSBC Bank Plc and is presently adirector of Colt Telecom Group Ltd, Rutland Trust Plc, Carron Acquisition Co Ltdand Lister Petter Investment Holdings Ltd. He was awarded the CBE in 1997 forservices to the Energy Industry and to Engineering. Dr Hawley's experience in managing Nuclear Electric Plc, the largest nucleargenerator in the United Kingdom, and British Energy Plc, the United Kingdom'sleading electricity supplier, gives him a unique understanding of the nucleargeneration sector in Europe and he is acknowledged as an international expert onpower generation and energy. During the three year period to the end of the financial year, Dr Hawley hasheld directorships in Rutland Trust Plc (September 2000 - July 2007), ColtTelecom Group Ltd (August 1998 - present),Carron Acquisition Co Ltd (April 2006- present) and Lister Petter Investment Holdings Ltd (September 2006 - present). Dr Hawley was appointed a director of Berkeley Resources Limited on 20 April2006. Matthew Syme Managing Director Qualifications - B.Com, CA Mr Syme is a Chartered Accountant and has over 20 years experience as a seniorexecutive of a number of companies in the Australian resources and mediasectors. He was a Manager in a major international Chartered Accounting firmbefore spending 3 years as an equities analyst in a large stockbroking firm. Hewas then Chief Financial Officer of Pacmin Mining Limited, a successfulAustralian gold mining company, as well as a number of other resourcescompanies. Mr Syme was appointed a director of Berkeley Resources Limited on 27 August2004. Mr Syme has not held any other directorships of listed companies in thelast three years. DIRECTORS' REPORT (continued) James Ross Technical Director Qualifications - B.Sc. (Hons.), PhD, FAusIMM, FAICD Dr Ross is a leading international geologist whose technical qualificationsinclude an honours degree in Geology at UWA and a PhD in Economic Geology fromUC Berkeley. He first worked with Western Mining Corporation Limited for 25years, where he held senior positions in exploration, mining and research.Subsequent appointments have been at the level of Executive Director, ManagingDirector and Chairman in a number of small listed companies in exploration,mining, geophysical technologies, renewable energy and timber. His considerableinternational experience in exploration and mining includes South America,Africa, South East Asia and the Western Pacific. Dr Ross chairs the Boards of two geosciences research centres and twofoundations concerned with geosciences education in Western Australia. He was appointed a director of Berkeley Resources Limited on 4 February 2005 andhas not been a director of another listed company in the three years prior tothe end of the financial year. Senor Jose Ramon Esteruelas Non-Executive Director Senor Esteruelas is an experienced Spanish executive whose senior executiveroles have included Director General of Correos y Telegrafos (the Spanish postalservice), President of Minas de Almaden y Arrayanes SA (formerly the world'slargest mercury producer) and Chief Executive Officer of Compania Espanola deTabaco en Rama S.A., the leading tobacco transforming company in Spain. Senor Esteruelas was appointed a Director of Berkeley Resources Limited on 16November 2006. Senor Esteruelas has not held any other directorships of listedcompanies in the last three years. Sean James Non-Executive Director Qualifications - B.Sc. (Hons.) Mr James is a mining engineer and was formerly the Managing Director of theRossing Uranium Mine in Namibia which is the world's largest low grade, open pituranium mine. After 16 years at Rossing, he returned to London as a Group MiningExecutive at Rio Tinto Plc in London. Mr James' experience in managing the Rossing mine is ideally suited for the typeof uranium mining operations the Company aims to develop in the IberianPeninsula. Mr James was appointed a Director of Berkeley Resources Limited on 28 July 2006.Mr James has not held any other directorships of listed companies in the lastthree years. Shane Cranswick Company Secretary Qualifications - B.Com, CA, ACIS, SA Fin Mr Cranswick gained a Bachelor of Commerce degree from the University of WesternAustralia and is a member of the Institute of Chartered Accountants, theInstitute of Chartered Secretaries and the Financial Services Institute ofAustralasia. He commenced his career with an international Chartered Accountingfirm and has since worked in the role of Company Secretary for a number oflisted companies that operate in the resources sector. Mr Cranswick was appointed Company Secretary of Berkeley Resources Limited on 30July 2004. DIRECTORS' REPORT (continued) Principal Activities The principal activities of the Consolidated Entity during the year consisted ofmineral exploration. There was no significant change in the nature of thoseactivities. Employees 2007 2006 The number of full time equivalent people employed by the ConsolidatedEntity at balance date 20 6 Dividends No dividends have been declared, provided for or paid in respect of thefinancial year ended 30 June 2007 (2006: nil). Earnings Per Share 2007 2006 Cents Cents Basic loss per share (7.48) (7.33)Diluted loss per share (7.48) (7.33) Corporate Structure Berkeley Resources Limited is a company limited by shares that is incorporatedand domiciled in Australia. The Company has prepared a consolidated financialreport including the entities it acquired and controlled during the financialyear. Consolidated Results 2007 2006 $ $ Loss of the Consolidated Entity before income tax expense (7,430,597) (3,741,426)Income tax expense - -Net loss (7,430,597) (3,741,426)Net loss attributable to minority interest 1,116,026 -Net loss attributable to members of Berkeley Resources Limited (6,314,571) (3,741,426) Review of Operations AND ACTIVITIES The net loss of the Consolidated Entity after minority interests for the yearended 30 June 2007 was $6,314,571 (2006:$3,741,426). Included in this loss wasan amount of $2,357,250 (2006:$1,515,234) representing share based incentiveoptions and an expense of $845,912 in relation to the acquisition of ENUSA'sexploration database for the Salamanca I project. During the year the Company continued its focus on developing its uraniumexploration projects in Spain. This included further review of its explorationdatabases and the database for the Salamanca I project acquired from the Spanishnational uranium company, ENUSA in October 2006. Drilling commenced in December2006 at the Salamanca I project with a particular focus on the Retortillodeposit. At the Caceres III project, the main focus was on the Saguazal prospectwhere initial drill testing was completed in the June 2007 quarter. In April 2007 Berkeley calculated an initial JORC compliant inferred resourcefor the Retortillo and Zona 7 uranium deposits totalling 11.9 million pounds ofU3O8 at an average grade of 723ppm. This estimate was based on verificationand re-interpretation of the ENUSA database together with the aid of an eighteenhole drilling programme completed by Berkeley. Further drilling is currentlyunder way at and around Retortillo. DIRECTORS' REPORT (continued) Berkeley is also currently reviewing other uranium exploration opportunities inEurope and elsewhere. The Company sold its Strelley and Kangan North properties in the Pilbara regionof Western Australia for cash and share consideration, resulting in a gain onsale of $1m. In December 2006, the Company's securities commenced trading on the AlternativeInvestment Market (AIM) of the London Stock Exchange. Mr Sean James, former Managing Director of the Rossing Uranium Mine in Namibia,and Senor Jose Ramon Esteruelas, a very experienced Spanish executive, wereappointed to the Board of Directors during the year. Corporate and Financial Position The following material corporate events occurred during the year: • On 28 July 2006, Mr Sean James was appointed as an Executive Directorof the Company (see Current Directors and Officers above for further details). • On 26 September 2006, the Company announced it was proceeding with theadmission of its ordinary shares to trading the Alternative Investment Market(AIM) of the London Stock Exchange. The Company's securities commenced tradingon AIM on 6 December 2006; • On 16 November 2006, Senor Jose Ramon Esteruelas was appointed aDirector of the Company and Mr Ian Middlemas resigned as a Director of theCompany; • On 29 November 2006 the Company announced the sale of its Strelley andKangan North properties in the Pilbara region of Western Australia to Atlas IronLimited. In consideration for the sale the Company received $350,000 cash and1.3 million Atlas Iron Limited ordinary shares then valued at $650,000,resulting in a gain on sale of $1 million; and • During the period to 30 November 2006, 12,111,374 Listed Options and4,850,000 Unlisted Options were exercised which raised approximately $3.4million. 157,000 Listed Options were not exercised as at the expiry date of 30November 2006. • On 10 April 2007, Berkeley announced that the Company had completed aninitial JORC compliant resource estimate for the Retortillo and Zona 7 uraniumdeposits totalling 11.9 million pounds of U3O8 at an average grade of 723ppm. • On 26 April 2007, the Company completed the placement of 12.5 millionshares at a price of $1.85 per share with institutional investors raising$23.1million before expenses. • During the financial year Berkeley increased its interest in its mainSpanish operating subsidiary, Minera de Rio Alagon SL (''Rio Alagon''), from 51%to 77.5%. Business Strategies and Prospects The Consolidated Entity currently has the following business strategies andprospects over the medium to long term: • To increase its resources at and around Retortillo and commence pre-feasibility studies; • Complete the 100% acquisition of the Spanish uranium projects; and • Continue to examine new opportunities in mineral exploration. Risk Management The Board is responsible for the oversight of the Consolidated Entity's riskmanagement and control framework. Responsibility for control and risk managementis delegated to the appropriate level of management with the Managing Directorhaving ultimate responsibility to the Board for the risk management and controlframework. Arrangements put in place by the Board to monitor risk management includemonthly reporting to the Board in respect of operations and the financialposition of the Group. DIRECTORS' REPORT (continued) Significant Changes in the State of Affairs Other than as disclosed below, there were no significant changes in the state ofaffairs of the Consolidated Entity during the year. • In November 2006 the Company disposed of its Strelley and Kangan NorthProperties in Western Australia to Atlas Iron Limited. In consideration for thesale the Company received $350,000 cash and 1.3 million Atlas Iron Limitedordinary shares valued at $650,000 resulting in a gain of $1 million. • During the year Berkeley earned a further 22.5% in Rio Alagon to takeits holding to 77.5% at 30 June 2007. • In April 2007 the Company completed a placement of 12.5 million newordinary shares at a price of $1.85 per share, with institutional investors inEurope, the USA, Canada and Australia. The issue raised $23.1 million beforeexpenses. The Company had the following securities on issue at 30 June 2007: Issued and Paid Up Shares Listed Unlisted Director Director Unlisted Options - Options - Incentive Incentive Options -Capital $0.20 $0.20 Options - $1.00 Options - $0.70 $various Balance at 30 June 2006 71,130,321 12,268,374 4,850,000 - 3,000,000 10,600,000 Share placement 12,500,000 - - - - -Director Incentive Options Issue - - - 2,250,000 - -Exercise of Options 17,961,374 (12,111,374) (4,850,000) - (1,000,000) -Expiry of Options - (157,000) - - - - Total at 30 June 2007 101,591,695 - - 2,250,000 2,000,000 10,600,000 Since 30 June 2007 the only movement in securities on issue to 28 September 2007has been the issue of 2,970,000 employee options exercisable at $1.86 per shareunder the Employee Option Scheme on 6 August 2007. Significant Post Balance Date Events As at the date of this report there are no matters or circumstances, which havearisen since 30 June 2007 that have significantly affected or may significantlyaffect: (a) the operations, in financial years subsequent to 30 June2007, of the Consolidated Entity; (b) the results of those operations, in financial yearssubsequent to 30 June 2007, of the Consolidated Entity; or (c) the state of affairs, in financial years subsequent to 30June 2007, of the Consolidated Entity. Environmental Regulation and Performance The Consolidated Entity's operations are subject to various environmental lawsand regulations under the relevant government's legislation. Full compliancewith these laws and regulations is regarded as a minimum standard for alloperations to achieve. Instances of environmental non-compliance by an operation are identified eitherby external compliance audits or inspections by relevant government authorities. There have been no significant known breaches by the Consolidated Entity duringthe financial year. DIRECTORS' REPORT (continued) Likely Developments and Expected Results It is the Board's current intention that the Consolidated Entity will continuewith development of its Spanish uranium projects and will seek to complete the100% acquisition of Rio Alagon.The Company will also continue to examine newopportunities in mineral exploration, including uranium. All of these activities are inherently risky and the Board is unable to providecertainty that any or all of these activities will be able to be achieved. Inthe opinion of the Directors, any further disclosure of information regardinglikely developments in the operations of the Consolidated Entity and theexpected results of these operations in subsequent financial years may prejudicethe interests of the Company and accordingly no further information has beendisclosed. To view the financial tables please view the link below http://www.rns-pdf.londonstockexchange.com/rns/6024e_-2007-9-27.pdf This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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