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Berkeley Energia Ltd

Berkeley Energy - Annual Financial Report

RNS Number : 1736A
Berkeley Energy Limited
25 September 2015
 



BERKELEY ENERGY LIMITED

(Formerly Berkeley Resources Limited)

ANNUAL FINANCIAL REPORT

30 JUNE 2015

ABN 40 052 468 569

 

CORPORATE DIRECTORY

Directors

Mr Ian Middlemas -Chairman

Mr Paul Atherley - Managing Director

Dr James Ross - Non-Executive Director

Mr Robert Behets - Non-Executive Director

Company Secretary

Mr Clint McGhie

Executives

Mr Francisco Bellón - General Manager Operations

Mr Javier Colilla - Senior Vice President

Mr Hugo Schumann - Corporate Manager

Main Office

Unit 1C, Princes House
38 Jermyn Street
London SW1Y 6DN
United Kingdom
Telephone:        +
44 207 478 3900

Facsimile:         +44 207 434 4450

Spanish Office

Berkeley Minera Espana, S.L.

Carretera SA-322, KM 30

37495 Retortillo

Salamanca, Spain

Telephone:        +34 923 193903

Registered Office

Level 9, 28 The Esplanade

Perth  WA  6000

Australia

Telephone:        +61 8 9322 6322

Facsimile:         +61 8 9322 6558

Website

www.berkeleyenergy.com

Email

info@berkeleyenergy.com

Auditor

Stantons International

Level 2

1 Walker Avenue

West Perth WA 6005

 

Solicitors

DLA Piper Australia

Bankers

Spain

Santander Bank

 

Australia

Australia and New Zealand Banking Group Ltd

Share Registry

Australia

Computershare Investor Services Pty Ltd

Level 11

172 St Georges Terrace

Perth WA 6000

Telephone:        +61 8 9323 2000

Facsimile:         +61 8 9323 2033

 

United Kingdom

Computershare Investor Services Plc

PO Box 82

The Pavilions

Bridgewater Road

Bristol BS99 7NH

Telephone:        +44 870 889 3105

Stock Exchange Listings

Australia

Australian Securities Exchange Limited

Home Branch - Perth

Level 40, Central Park

152-158 St Georges Terrace

Perth  WA  6000

 

United Kingdom

London Stock Exchange - AIM
10 Paternoster Square
London EC4M 7LS

ASX/AIM Code

BKY  - Fully paid ordinary shares

Nominated Adviser and Broker

Numis Securities Limited
The London Stock Exchange Building
10 Paternoster Square
London EC4M 7LT

CONTENTS

 

Directors' Report


 

Consolidated Statement of Profit or Loss and Other Comprehensive Income


 

Consolidated Statement of Financial Position


 

Consolidated Statement of Cash Flows


 

Consolidated Statement of Changes in Equity


 

The following sections are available in the full version of the Annual Financial Report on Berkeley Energy Limited's website: www.berkeleyenergy.com

 

 

Notes to and forming part of the Financial Statements


 

Directors' Declaration


 

Auditor's Independence Declaration


 

Independent Auditor's Report


 

DIRECTORS' REPORT

 

The Directors of Berkeley Energy Limited (formerly Berkeley Resources Limited) submit their report on the Consolidated Entity consisting of Berkeley Energy Limited ('Company' or 'Berkeley' or 'Parent') and the entities it controlled at the end of, or during, the year ended 30 June 2015 ('Consolidated Entity' or 'Group').

OPERATING AND FINANCIAL REVIEW

Berkeley is a high impact, clean energy company focussed on bringing its wholly owned Salamanca Project ('Project') located in Western Spain into production.

During the year, the Company continued to drill out the shallow Zona 7 deposit which given its size, high grade and potentially low cost extraction has the potential to transform the economics of the Project.

The Zona 7 deposit is located within ten kilometres of the proposed processing plant and currently hosts an Inferred Mineral Resource Estimate (MRE) of 23.2 million tonnes averaging 589 ppm U3O8 for 30.1 million pounds of U3O8 (at a 200 ppm U3O8 cut-off grade).

An infill drilling programme to upgrade the resource to the Indicated category was completed in August 2015 and the final results, along with the updated MRE, are expected to be reported in September 2015.

Given the very positive impact Zona 7 is expected to have on the project's overall economics the Board has decided to push ahead with the permitting required and to rapidly incorporate this resource into the overall development plans.

Operations

Zona 7

In late 2012 a regional review of the areas surrounding the existing resources identified the southern extension of the Zona 7 deposit as the priority target.

In mid-2013, an eighteen hole, 1,128 metre reverse circulation ('RC') programme successfully extended the mineralisation 1.2 kilometres to the southwest.

The 2014 infill programme, which comprised 45 RC holes for 2,923 metres and five diamond core ('DD') holes for 391 metres, reported intersections with good continuity, both in terms of thickness and grade, with the previous more broadly spaced drilling.

The results included significant high grade intersections from shallow depths to a maximum depth of 73 metres, with thicknesses up to 25 metres (Table 1).

Table 1: Zona 7 - 2014 Drilling Programme - Select Intercepts

Hole No.

Down Hole Intercept

From Depth

(Down Hole)

Z7R-102

21m @ 3,101 ppm U3O8

5m

Z7R-101

25m @ 2,005 ppm U3O8

17m @ 1,517 ppm U3O8

11m

50m

Z7R-104

21m @ 1,535 ppm U3O8

10m @ 501 ppm U3O8

2m

26m

Z7R-096

16m @ 1,014 ppm U3O8

5m

Z7R-112

19m @ 2,332 ppm U3O8

30m

Z7R-140

20m @ 1,238 ppm U3O8

13m

Z7R-138

12m @ 1,422 ppm U3O8

18m @ 825 ppm U3O8

32m

47m

Z7R-137

13m @ 1,067 ppm U3O8

20m

Z7R-142

20m @ 607 ppm U3O8

16m

Z7R-139

11m @ 652 ppm U3O8

10m @ 1,033 ppm U3O8

26m

40m

Z7R-114

4m @ 1,633 ppm U3O8

20m

The MRE for Zona 7 was updated in November 2014, incorporating the additional drilling and sampling information from the 2013 and 2014 drilling campaigns and reported an Inferred MRE of 23.2 million tonnes averaging 589 ppm U3O8 for a contained 30.1 million pounds of U3O8 at a cut-off grade of 200 ppm U3O8.

In light of the overall size, high grades, broad thicknesses and the shallow depth of the Zona 7 deposit, and the potential impact this deposit could have on the Project's overall economics, the Company immediately commenced the key activities that would enable the deposit to be integrated into the overall Project.

The infill drilling programme and metallurgical testwork to upgrade the resource from the Inferred to the Indicated category comprised 90 RC holes for 6,226 metres and was completed in August 2015.

Assay results from an initial 39 drill holes in this programme have shown that the continuity of the mineralised zone is good and in line with expectations, both in terms of grade and thickness.

Significant high grade intersections have been recorded at shallow depths (from 7 metres), with thicknesses up to 40 metres. Outstanding intercepts include:

Table 2: Zona 7 - 2015 Drilling Programme - Initial Results - Select intercepts

Hole No.

Down Hole Intercept

From Depth

(Down Hole)

Z7R-145

5m @ 1,800 ppm U3O8

50m

Z7R-148

6m @ 1,422 ppm U3O8

54m

Z7R-167

9m @ 808 ppm U3O8

13m

Z7R-168

6m @ 801 ppm U3O8

13m @ 940 ppm U3O8

8m @ 1,173 ppm U3O8

10m

23m

53m

Z7R-169

13m @ 805 ppm U3O8

27m

Z7R-171

37m @ 689 ppm U3O8

16m

Z7R-201

21m @ 1,150 ppm U3O8

21m

Z7R-203

40m @ 949 ppm U3O8

7m

Results from all remaining holes are due to be reported in September 2015, followed by an upgraded Mineral Resource Estimate.

Metallurgical testwork results have confirmed that the Zona 7 ore is amenable to low cost heap leaching through the proposed processing facilities.

The results indicated that recoveries of over 85% can be expected with low acid consumption and at a coarse crush size. The ore is easy to crush and has a low abrasion index. It also exhibits good geotechnical properties, suitable for high lifts on the heap leach pads.

The high recoveries were achieved very rapidly, in less than thirty days of leaching, with virtually 100% of the soluble uranium going into solution and therefore readily recoverable in the proposed processing facilities.

Retortillo / Alameda

In addition to the progress made at Zona 7, a number of work programmes were completed at the Retortillo and Alameda projects, these included:

·   Infill drilling programme aimed at upgrading the classification of specific areas of the Retortillo MRE to the Measured category;

·   Further metallurgical testwork programmes;

·   Development of a Geological and Metallurgical domain model;

·   Optimisation of the open pit design and detailed mine design and production scheduling using the upgraded MRE block models; and

·   Enhanced design of the project infrastructure and site facilities.

These work programmes will feed into a Definitive Feasibility Study for the integrated Salamanca Project.

Drilling and Mineral Resource Update

An infill drilling programme 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 in late 2014.

The programme 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 DD drilling will facilitate enhanced geological and structural understanding of the deposit.

A total of 75 RC holes for 4,785 metres, 4 DD holes for 291 metres and 4 open holes for 150 metres were drilled, forming the basis for the updated MRE reported in April 2015.

The results from the RC drill holes sampled have shown that there is good continuity of the mineralised zone, both in terms of thickness and grade, between the previous broader spaced holes in the targeted area of the deposit. 

Significant high grade intersections were recorded at shallow depths (from 14 metres below surface to a maximum depth of 94 metres), with thicknesses up to 30 metres. High grade intercepts included 30 metres @ 1,670 ppm U3O8, 13 metres @ 2,484 ppm U3O8, 16 metres @ 1,329 ppm U3O8, and 10 metres @ 1,909 ppm U3O8.

The MRE for Retortillo was updated in April 2015, incorporating additional drilling and sampling information from the 2014 drilling campaign. The MRE was classified as Measured, Indicated or Inferred, based on the guidelines recommended in the JORC Code (2012), and is reported at a cut-off grade of 200 ppm U3O8 (Table 3).

Table 3: Retortillo - Mineral Resource Estimate, April 2015

Category

Tonnage

(million tonnes)

Grade

(U3O8 ppm)

Contained U3O8

(million pounds)

Measured

4.8

412

4.4

Indicated

11.7

349

9.0

Inferred

0.2

373

0.1

Total

16.6

367

13.5

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

Permitting

The permitting process for the Salamanca Project is now well advanced, with the Environmental License and the Mining License already granted. On 20 July 2015, Berkeley announced that the Nuclear Safety Council had issued a favourable report for the grant of the Initial Authorisation of the proposed process plant as a radioactive facility.

The report is compulsory and binding on the Ministry of Industry, Energy and Tourism, for the grant of the Initial Authorisation. The report is an official recognition of the purpose and selected location of the process plant, and represents a significant permitting milestone for the Company

The Initial Authorisation allows the commencement of preliminary infrastructure works to access the plant, notwithstanding any other permits that may be required.

2015 Drilling Summary

A summary of all resource and exploration drilling completed by Berkeley during the year is presented in the following table:

Table 4:  2014/2015 Drilling Summary


Diamond

RC

Total


Holes

Metres

Holes

Metres

Holes

Metres

Retortillo

4

291

69

4,695

73

4,986

Alameda

-

-

-

-

-

-

Zona 7

10

725

82

5,500

92

6,225

Total

14

1,016

151

10,195

165

11,211

Corporate

Mr Paul Atherley was appointed as Managing Director of the Company based in London with effect from 1 July 2015. Mr Atherley is an accomplished mining executive with over 30 years resource industry experience in UK, Australia and China.

He is a Mining Engineer from Imperial College London and holds postgraduate qualifications including an MBA and a MAppSc in Mining Geomechanics. He has held a number of senior executive and board positions during his career.

He has completed a number of acquisitions and financings of resource projects in Australia, South East Asia, Africa and Western Europe, and has well-established relationships with European and Australian capital markets.

His immediate focus will be the integration of the high grade Zona 7 deposit into the project's development plans, thereby potentially increasing the scale of the project and to arrange the project's development finance.

A meeting of shareholders of the Company was held on 31 July 2015 which approved the change of name to Berkeley Energy Limited in order to reflect the Company's transition from an explorer to a producer. The meeting also resulted in the renewal of existing Performance Rights and award of new Performance Rights to the Executive team who will be responsible for bringing the Salamanca Project into production.

Results of Operations

The Consolidated Entity's net loss after tax for the year ended 30 June 2015 was $7,865,605 (2014: $7,533,948).  This loss is partly attributable to:

(i)         Exploration and evaluation expenses of $6,677,550 (2014: $6,935,123), which is attributable to the Group's accounting policy of expensing exploration and evaluation expenditure incurred subsequent to the acquisition of the rights to explore and up to the successful completion of definitive feasibility studies for each separate area of interest.

The reduced exploration and evaluation expenditure in the year ended 30 June 2015 is a reflection of the activities undertaken during the year and an ongoing focus on cost control across all areas of the business.

(ii)        Share based payments expense of $866,475 (2014: $809,174) was recognised in respect of incentive securities granted to directors, employees and key consultants. The Company expenses the incentive securities over the vesting period.

The Consolidated Entity also recognised interest income of $530,237 (2014: $825,297), and a rebate of $58,592 (2014: $338,074) was received in respect of R&D activities undertaken in Australia. The reduction in interest income reflects the reduced average cash position from 2014 to 2015 and a general reduction in interest rates from 2014 to 2015.

Financial Position

At 30 June 2015, the Group had cash reserves of A$13.4 million, with no debt. This puts the Group in a strong financial position as it looks to incorporate the Zona 7 deposit into the overall development plans for the Salamanca Project. The Company continues to maintain a strong focus on cost control across all areas of the business

The Group had net assets of $28,538,535 at 30 June 2015 (2014: $35,582,008), a decrease of $7,043,473 or approximately 19.8% compared with the previous year.  This decrease is consistent with the reduced cash balance and is largely attributable to the comprehensive loss for the year, comprising: (i) the current year's net loss after income tax, (ii) the foreign exchange gain arising on the translation of the Group's foreign operations and (iii) movement in reserves.

Business Strategies and Prospects for Future Financial Years

Berkeley's strategic objective is to create long-term shareholder value by becoming a uranium producer in the medium term, through the ongoing exploration, appraisal and development of its flagship Salamanca Project located in Spain.

The Company has a 100% interest in a total Mineral Resource estimated at 88.2 million pounds of contained U3O8 (85.2 million tonnes at 470 ppm U3O8 at a cut-off grade of 200 ppm U3O8) but has not to date defined Ore Reserves in accordance with the JORC Code, nor has it commenced production. To achieve its strategic objective, the Company currently has the following business strategies and prospects over the medium term:

·      Incorporate the Zona 7 deposit into the development plans for the Salamanca Project;

·      Completion of a DFS for the Salamanca Project;

·      Commence evaluation of project finance options;

·      Continue the permitting process with a view to obtaining all necessary permits and licences for construction and production in a timely fashion;

·      Subject to the results of a positive DFS, obtaining all necessary permits and licences and project financing, advance the Salamanca Project through the development and construction phases and into production;

·      Continue to explore its portfolio of tenements in Spain with a view to growing the resource base and potentially providing additional production sources to incorporate into the Salamanca Project; and

·      Continue to assess new uranium and other business opportunities which can enhance shareholder value.

As with any other mining project, all of these activities are inherently risky and the Board is unable to provide certainty that any or all of these activities will be able to be achieved.  The material business risks faced by the Company that are likely to have an effect on the Company's future prospects, and how the Company manages these risks, include:

·      The exploration for, and development of, mineral deposits involves a high degree of risk. The ultimate development of the Company's project into a producing mine is dependent on a number of factors, including; successful studies, obtaining all necessary permits and licences, and subsequently the required project financing.

To mitigate this risk, the Company has undertaken systematic and staged exploration and testing programmes, and a number of technical and economic studies with respect to the Salamanca Project. Further studies, including a DFS, will also be completed prior to advancing the Salamanca Project to the construction phase and into production.

The construction phase of the Company's Project will require substantial additional financing.  Failure to obtain sufficient financing may result in delaying or indefinite postponement of any development of the Project. There can be no assurance that additional capital or other types of financing will be available if needed or that, if available, the terms of such financing will be favourable to the Company.

The successful development of the Company's Project will also be dependent on the granting of all permits necessary for the construction and production phases. As with any exploration and development project, there is no guarantee that the Company will be successful in applying for and maintaining all required permits and licences to commence construction and subsequently enter into production;

·      The Company may be adversely affected by fluctuations in commodity prices. The price of uranium fluctuates widely and is affected by numerous factors beyond the control of the Company. Future production from the Company's Project will be dependent upon the price of uranium being adequate to make these properties economic. The Company currently does not engage in any hedging or derivative transactions to manage commodity price risk, but as the Company's Project advances, this policy will be reviewed periodically; and

·      Global financial conditions may adversely affect the Company's growth and profitability. Many industries, including the mineral resource industry, are impacted by these market conditions. Some of the key impacts of the current financial market turmoil include contraction in credit markets resulting in a widening of credit risk, devaluations and high volatility in global equity, commodity, foreign exchange and energy markets, and a lack of market liquidity. A slowdown in the financial markets or other economic conditions may adversely affect the Company's growth and ability to finance its activities.



 

DIRECTORS

The names of Directors in office at any time during the financial year or since the end of the financial year are:

 

Mr Ian Middlemas -Chairman

Mr Paul Atherley - Managing Director (appointed 1 July 2015)

Dr James Ross - Non-Executive Director

Mr Robert Behets - Non-Executive Director

Unless otherwise disclosed, Directors held their office from 1 July 2014 until the date of this report.

CURRENT DIRECTORS AND OFFICERS

Ian Middlemas 

Chairman

Qualifications - B.Com, CA

Mr Middlemas is a Chartered Accountant, a member of the Financial Services Institute of Australasia and holds a Bachelor of Commerce degree.  He worked for a large international Chartered Accounting firm before joining the Normandy Mining Group where he was a senior group executive for approximately 10 years.  He has had extensive corporate and management experience, and is currently a director with a number of publicly listed companies in the resources sector. 

Mr Middlemas was appointed a Director and Chairman of Berkeley Energy Limited on 27 April 2012.  During the three year period to the end of the financial year, Mr Middlemas has held directorships in Paringa Resources Limited (October 2013 - present), Prairie Mining Limited (August 2011 - present), Pacific Ore Limited (April 2010 - present), Wildhorse Energy Limited (January 2010 - present), Equatorial Resources Limited (November 2009 - present), WCP Resources Limited (September 2009 - present), Sovereign Metals Limited (July 2006 - present), Odyssey Energy Limited (September 2005 - present), Papillon Resources Limited (May 2011 - October 2014), Sierra Mining Limited (January 2006 - June 2014) and Decimal Software Limited (July 2013 - April 2014).

Paul Atherley

Managing Director

Qualifications - BSc MAppSc MBA ARSM

Mr Atherley is a Mining Engineer from Imperial College London and has held numerous senior executive and board positions during his career. He served as Executive Director of the investment banking arm of HSBC Australia where he undertook a range of advisory roles in the resources sector. He has completed a number of acquisitions and financings of resource projects in Australia, South East Asia, Africa and Western Europe, and has well-established relationships with European and Australian capital markets. As the Managing Director of ASX/AIM listed Leyshon Resources Limited, Mr Atherley was responsible for the exploration, development and successful sale of the Zheng Guang Gold-Zinc Project in Northern China.

Mr Atherley has developed strong connections within Chinese business, industry bodies and senior government officials, including the most senior levels of the state owned energy companies. Until recently he was the Chairman of the British Chamber of Commerce in China, Vice Chairman of the China Britain Business Council in London and served on the European Union Energy Working Group in Beijing. He has been a regular business commentator on China, hosting events in Beijing and appearing on CCTVNews and China Radio International.

Mr Atherley was appointed a director of Berkeley Energy Limited on 1 July 2015. During the three year period to the end of the financial year, Mr Atherley has also held directorships in Leyshon Resources Limited (May 2004 - present) and Leyshon Energy Limited (January 2014 - present).

James Ross AM

Non-Executive Director

Qualifications - B.Sc. (Hons.), PhD, FAusIMM, FAICD

Dr Ross is a leading international geologist whose technical qualifications include an honours degree in Geology at UWA and a PhD in Economic Geology from UC Berkeley. He first worked with Western Mining Corporation Limited for 25 years, where he held senior positions in exploration, mining and research. Subsequent appointments have been at the level of Executive Director, Managing Director and Chairman in a number of small listed companies in exploration, mining, geophysical technologies, renewable energy and timber. His considerable international experience in exploration and mining includes South America, Africa, South East Asia and the Western Pacific.

Dr Ross is Chairman of the John De Laeter Centre, a member of the Technology Industry Advisory Council, the immediate past Chair of Earth Science Western Australia Inc. and a former Director of Kimberley Foundation Australia Ltd.

He was appointed a Director of Berkeley Energy Limited on 4 February 2005.  He has not been a Director of another listed company in the three years prior to the end of the financial year.

Robert Behets 

Non-Executive Director

Qualifications - B.Sc (Hons), FAusIMM, MAIG

Mr Behets is a geologist with over 25 years' experience in the mineral exploration and mining industry in Australia and internationally. He was instrumental in the founding, growth and development of Mantra Resources Limited, an African focused uranium company, through to its acquisition by ARMZ for approximately A$1 billion in 2011. Prior to Mantra, Mr Behets held various senior management positions during a long career with WMC Resources Limited.

Mr Behets has a strong combination of technical, commercial and managerial skills and extensive experience in exploration, mineral resource and ore reserve estimation, feasibility studies and operations across a range of commodities, including uranium, gold and base metals. He is a Fellow of The Australasian Institute of Mining and Metallurgy, a Member of the Australian Institute of Geoscientists and was also previously a member of the Australasian Joint Ore Reserve Committee ('JORC').

Mr Behets was appointed a Director of the Company on 27 April 2012.  During the three year period to the end of the financial year, Mr Behets has also held a directorship in Papillon Resources Limited (May 2012 - October 2014).

Mr Clint McGhie

Company Secretary and Chief Financial Officer

Qualifications - B.Com, CA, ACIS, FFin

Mr McGhie is a Chartered Accountant and Chartered Secretary.  He commenced his career at a large international Chartered Accounting firm, before moving to commerce in the role of financial controller and company secretary. Mr McGhie now works in the corporate office of a number of public listed companies focussed on the resources sector.

Mr McGhie was appointed Company Secretary and Chief Financial Officer of Berkeley Energy Limited on 18 May 2012.

CURRENT EXECUTIVE

Mr Francisco Bellón del Rosal

General Manager Operations

Qualifications - M.Sc, MAusIMM

Mr Bellón is a Mining Engineer specialising in mineral processing and metallurgy with over 20 years' experience in operational and project management roles in Europe, South America and West Africa. He held various senior management roles with TSX listed Rio Narcea Gold Mines during a 10 year career with the company, including Plant Manager for El Valle/Carles process facility and Operations Manager prior to its acquisition by Lundin Mining in 2007. During this period, Mr Bellón was involved in the development, construction, commissioning and production phases of a number of mining operations in Spain and Mauritania including El Valle-Boinás / Carlés (open pit and underground gold-copper mines in northern Spain), Aguablanca (open pit nickel-copper mine in southern Spain) and Tasiast (currently Kinross' world class open pit gold mine in Mauritania). He subsequently joined Duro Felguera, a large Spanish engineering house, where as Manager of the Mining Business, he managed the peer review, construction and commissioning of a number of large scale mining operations in West Africa and South America in excess of US$1B.

Mr Bellón joined Berkeley Energy Limited in May 2011.

Mr Javier Colilla Peletero

Senior Vice President Corporate

Qualifications - Econ (Hons), LLB (Hons), MBA

Mr Colilla is a Mineral Economist and Lawyer. With prior experience in auditing and insurance sectors, he has over 25 years' experience in the mining sector commencing as the Managing Director of an international drilling company in the early 1980's. He subsequently worked for Anglo American as General Manager of their Spanish subsidiaries, whilst also contributing as international staff member to several projects in Europe and South America. Mr Colilla held various executive management roles during a long career with the TSX listed Rio Narcea Gold Mines, including Vice President Business Development, Chief Financial Officer, Senior Vice President Corporate, as well as Administrator/Director of its subsidiaries. During this period, he was involved in all aspects of commercial, legal and joint venture management, permitting, stakeholder engagement, government liaison and project financing for a number of mining operations in Spain and internationally including El Valle-Boinás / Carlés, Aguablanca and Tasiast. Following the acquisition of Rio Narcea Gold Mines by Lundin Mining in 2007, Mr Colilla consulted on renewable energies projects and advised several international leading legal firms in the areas of public aid financing (domestic and international) and due diligence exercises in relation to Spanish mining companies being acquired by multinational mining groups.

Mr Colilla joined Berkeley Energy Limited in April 2010.

Mr Hugo Schumann

Corporate Manager

Qualifications - MBA, CFA, B.Bus.Sci (Hons)

Mr Schumann commenced his career as a management consultant before moving into the natural resources sector, initially as part of an investing team in London focused on early stage mining projects and then working in corporate development functions for a number of listed mining and energy companies. He has a decade of experience in the financing and development of mining and energy projects globally across a range of commodities. He holds an MBA from INSEAD, is a CFA Charterholder and holds a Bachelor of Business Science (Finance CA) from the University of Cape Town.

Mr Schumann joined Berkeley Energy Limited in July 2015.

PRINCIPAL ACTIVITIES

The principal activities of the Consolidated Entity during the year consisted of mineral exploration. There was no significant change in the nature of those activities.

EMPLOYEES

 


2015

2014

The number of full time equivalent people employed by the Consolidated Entity at balance date

33

29

DIVIDENDS

No dividends have been declared, provided for or paid in respect of the financial year ended 30 June 2015 (2014: nil).

EARNINGS PER SHARE

 


2015
Cents

2014
Cents

Basic loss per share

(4.36)

(4.19)

Diluted loss per share

(4.36)

(4.19)

CORPORATE STRUCTURE

Berkeley Energy Limited is a company limited by shares that is incorporated and domiciled in Australia.  The Company has prepared a consolidated financial report including the entities it acquired and controlled during the financial year.

CONSOLIDATED RESULTS

 


2015

$

2014

$

Loss of the Consolidated Entity before income tax

(7,865,605)

(7,577,578)

Income tax benefit/(expense)

-

43,630

Net loss

(7,865,605)

(7,533,948)

 

Net loss attributable to members of Berkeley Energy Limited

(7,865,605)

(7,533,948)

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

Other than as disclosed below, there were no significant changes in the state of affairs of the Consolidated Entity during the year.

·      On 26 November 2014, the Company announced an updated Inferred mineral resource estimate for the Zona 7 deposit of 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.

·      On 17 June 2015, Berkeley advised that it had appointed Mr Paul Atherley as Managing Director of the Company with effect from 1 July 2015. Mr Atherley was engaged under a consultancy deed with North Asia Metals Limited ('NAML'). In accordance with the terms of the engagement, NAML was issued the following incentive options on 19 June 2015:

2,000,000 incentive options exercisable at £0.15 each on or before 30 June 2018; and

2,000,000 incentive options exercisable at £0.20 each on or before 30 June 2019.

These options vested on commencement (1 July 2015) and the value of the options granted to NAML was $470,000. This value has been expensed over the vesting period of the options. The fair value has been estimated as at the date of grant using the binomial option pricing model taking into account the terms and conditions upon which the options were granted.

·      The Company also issued incentive options to employees and key consultants on 19 June 2015, including:

1,600,000 incentive options exercisable at £0.15 each on or before 30 June 2018; and

1,600,000 incentive options exercisable at £0.20 each on or before 30 June 2019.

These options vested immediately. The value of the options granted to employees and key consultants was $377,600 and this amount was expensed immediately. The fair value has been estimated as at the date of grant using the binomial option pricing model taking into account the terms and conditions upon which the options were granted.

SIGNIFICANT POST BALANCE DATE EVENTS

(i)    On 1 July 2015, Mr Paul Atherley commenced as Managing Director of the Company;

(ii)    On 31 July 2015, following shareholder approval at a General Meeting, the Company changed its name to Berkeley Energy Limited.

(iii)   On 31 July 2015, Shareholders approved the renewal of Berkeley's Performance Rights Plan and to vary the terms of 2,776,000 existing Performance Rights by extending the milestone and expiry dates by 24 months. Following these approvals, a further 4,804,000 Performance Rights were issued, with expiry dates ranging from 30 June 2016 to 31 December 2019. The value of these Performance Rights granted was $1,614,370. This value will be expensed over the vesting period of the Performance Rights. The fair value has been estimated as at the date of grant using the seven day volume weighted average share price prior to issuance.

Other than as outlined above, as at the date of this report there are no matters or circumstances, which have arisen since 30 June 2015 that have significantly affected or may significantly affect:

·      the operations, in financial years subsequent to 30 June 2015, of the Consolidated Entity;

·      the results of those operations, in financial years subsequent to 30 June 2015, of the Consolidated Entity; or

·      the state of affairs, in financial years subsequent to 30 June 2015, of the Consolidated Entity.

ENVIRONMENTAL REGULATION AND PERFORMANCE

The Consolidated Entity's operations are subject to various environmental laws and regulations under the relevant government's legislation. Full compliance with these laws and regulations is regarded as a minimum standard for all operations to achieve.

Instances of environmental non-compliance by an operation are identified either by external compliance audits or inspections by relevant government authorities.

There have been no significant known breaches by the Consolidated Entity during the financial year.

In September 2012, Berkeley qualified for certification in accordance with ISO 14001 of Environmental Management, which sets out the criteria for an environmental management system, and UNE 22480 of Sustainable Mining Management, which allows for the systematic monitoring and tracking of sustainability indicators, and is useful in the establishment of targets for constant improvement. These certificates are renewed following annual audits established by the regulations, with the most recent audit successfully completed in July 2015.

INFORMATION ON DIRECTORS' INTERESTS IN SECURITIES OF BERKELEY

 


Interest in Securities at the Date of this Report

Current Directors

Ordinary Shares(i)

$0.45 Unlisted Options(ii)

£0.15 Incentive Options(iii)

£0.20 Incentive Options(iv)

Performance Rights(v)

Ian Middlemas

5,300,000

4,000,000

-

-

-

Paul Atherley

854,000

-

2,000,000

2,000,000

1,600,000

James Ross

415,000

-

-

-

200,000

Robert Behets

1,240,000

1,000,000

-

-

730,000

Notes

(i)             "Ordinary Shares" means fully paid ordinary shares in the capital of the Company.

(ii)         "$0.45 Unlisted Options" means an unlisted option to subscribe for 1 Ordinary Share in the capital of the Company at an exercise price of $0.45 each on or before 30 June 2016.

(iii)        "£0.15 Incentive Options" means an unlisted option to subscribe for 1 Ordinary Share in the capital of the Company at an exercise price of £0.15 each on or before 30 June 2018.

(iv)       "£0.20 Incentive Options" means an unlisted option to subscribe for 1 Ordinary Share in the capital of the Company at an exercise price of £0.15 each on or before 30 June 2019.

(v)        "Performance Rights" means the right to subscribe to 1 Ordinary Share in the capital of the Company upon the completion of specific performance milestones by the Company.

SHARE OPTIONS AND PERFORMANCE RIGHTS

At the date of this report the following Options and Performance Rights have been issued over unissued Ordinary Shares of the Company:

•     1,750,000 Unlisted Options at an exercise price of $0.475 each that expire on 22 December 2015.

•     5,500,000 Unlisted Options at an exercise price of $0.45 each that expire on 30 June 2016.

•     3,600,000 Unlisted Options at an exercise price of £0.15 each that expire on 30 June 2018.

•     3,600,000 Unlisted Options at an exercise price of £0.20 each that expire on 30 June 2019.

•     830,000 Performance Rights at no exercise price that expire on 30 June 2016.

•     1,480,000 Performance Rights at no exercise price that expire on 30 June 2017.

•     2,340,000 Performance Rights at no exercise price that expire on 31 December 2018.

•     2,930,000 Performance Rights at no exercise price that expire on 31 December 2019.

 

These Options and Performance Rights do not entitle the holders to participate in any share issue of the Company or any other body corporate.  During the financial year, there were no new shares issued as a result of the exercise of Performance Rights, and no new shares issued as a result of the exercise of Unlisted Options.  There were 300,000 Performance Rights that lapsed (forfeited) and 1,118,000 Performance Rights that expired during the year. Since 30 June 2015, no shares have been issued as a result of the exercise of Unlisted Options or Performance Rights on issue. 1,000,000 Unlisted Options expired unexercised on 21 September 2015.

MEETINGS OF DIRECTORS

The following table sets out the number of meetings of the Company's Directors held during the year ended 30 June 2015, and the number of meetings attended by each director.

 

Current Directors

Board Meetings
Number Eligible to Attend

Board Meetings
Number Attended

Ian Middlemas

4

4

Paul Atherley

-

-

James Ross

4

4

Robert Behets

4

4

REMUNERATION REPORT (AUDITED)

 

This report details the amount and nature of remuneration of each director and executive officer of the Company.

 

Details of Key Management Personnel

 

The Key Management Personnel ('KMP') of the Group during or since the end of the financial year were as follows:

 

Directors

Mr Ian Middlemas                                                Chairman

Mr Paul Atherley                                   Managing Director (appointed 1 July 2015)

Dr James Ross                                   Non-Executive Director

Mr Robert Behets                                                Non-Executive Director

 

Other KMP

Mr Francisco Bellón del Rosal        General Manager Operations

Mr Javier Colilla Peletero                  Senior Vice President Corporate

Mr Hugo Schumann                           Corporate Manager (effective 1 July 2015)

Mr Clint McGhie                                   Chief Financial Officer and Company Secretary

 

There were no other key management personnel of the Company or the Group.  Unless otherwise disclosed, the Key Management Personnel held their position from 1 July 2014 until the date of this report.

 

Remuneration Policy

 

The remuneration policy for the Group's KMP has been developed by the Board taking into account the size of the Group, the size of the management team for the Group, the nature and stage of development of the Group's current operations and market conditions and comparable salary levels for companies of a similar size and operating in similar sectors.

 

In addition to considering the above general factors, the Board has also placed emphasis on the following specific issues in determining the remuneration policy for key management personnel:

•     the Group is currently focused on undertaking exploration and development activities with a view to expanding and developing its resources.  In line with the Group's accounting policy, all exploration expenditure up to and including the preparation of a definitive feasibility study is expensed.  The Group continues to examine new business opportunities in the energy and resources sector;

•     risks associated with resource companies whilst exploring and developing projects; and

•     other than profit which may be generated from asset sales (if any), the Group does not expect to be undertaking profitable operations until sometime after the successful commercialisation, production and sales of commodities from one or more of its current projects, or the acquisition of a profitable mining operation.

 

Remuneration Policy for Executives

 

The Group's remuneration policy is to provide a fixed remuneration component and a performance based component (options, performance rights and a cash bonus, see below).  The Board believes that this remuneration policy is appropriate given the considerations discussed in the section above and is appropriate in aligning KMP objectives with shareholder and business objectives.

 

Fixed Remuneration

Fixed remuneration consists of base salaries, as well as employer contributions to superannuation funds and other non-cash benefits.  Non-cash benefits may include provision of motor vehicles, housing and health care benefits.

Fixed remuneration is reviewed annually by the Board.  The process consists of a review of Company and individual performance, relevant comparative remuneration externally and internally and, where appropriate, external advice on policies and practices.

 

Performance Based Remuneration - Short Term Incentive

Some KMP are entitled to an annual cash bonus upon achieving various key performance indicators ('KPI's'), as set by the Board.  Having regard to the current size, nature and opportunities of the Company, the Board has determined that these KPI's will include measures such as successful completion of exploration activities (e.g. completion of exploration programmes within budgeted timeframes and costs), development activities (e.g. completion of feasibility studies), corporate activities (e.g. recruitment of key personnel) and business development activities (e.g. project acquisitions and capital raisings).  On an annual basis, after consideration of performance against key performance indicators, the Board determines the amount, if any, of the annual cash bonus to be paid to each KMP.

During the 2015 financial year, a total bonus sum of $57,480 (2014: $73,888) was paid to KMP.

 

Performance Based Remuneration - Long Term Incentive

The Group has adopted a long-term incentive plan ('LTIP') comprising the 'Berkeley Performance Rights Plan' (the 'Plan') to reward KMP and key employees for long-term performance. Shareholders approved the Plan in April 2013 at a General Meeting of Shareholders and Performance Rights were issued under the Plan in May 2013 and March 2014. Shareholders approved the renewal of the Plan in July 2015 and 4,804,000 Performance Rights were issued on 31 July 2015.

The Plan provides for the issuance of unlisted performance share rights ('Performance Rights') which, upon satisfaction of the relevant performance conditions attached to the Performance Rights, will result in the issue of an Ordinary Share for each Performance Right. Performance Rights are issued for no consideration and no amount is payable upon conversion thereof.

To achieve its corporate objectives, the Company needs to attract and retain its key staff, whether employees or contractors. The Board believes that grants made to eligible participants under the Plan will provide a powerful tool to underpin the Company's employment and engagement strategy, and that the implementation of the Plan will:

(a)        enable the Company to incentivise and retain existing key management personnel and other eligible employees and contractors needed to achieve the Company's business objectives;

(b)        enable the Company to recruit, incentivise and retain additional key management personnel and other eligible employees and contractors needed to achieve the Company's business objectives;

(c)        link the reward of key staff with the achievements of strategic goals and the long term performance of the Company;

(d)        align the financial interest of participants of the Plan with those of Shareholders; and

(e)        provide incentives to participants of the Plan to focus on superior performance that creates Shareholder value.

Performance Rights granted under the Plan to eligible participants will be linked to the achievement by the Company of certain performance conditions as determined by the Board from time to time. These performance conditions must be satisfied in order for the Performance Rights to vest.  Upon Performance Rights vesting, Ordinary Shares are automatically issued for no consideration. If a performance condition of a Performance Right is not achieved by the expiry date then the Performance Right will lapse.

Prior to the adoption of the Plan, the Board had chosen to issue incentive options to KMP as a key component of the incentive portion of their remuneration, in order to attract and retain the services of the KMP and to provide an incentive linked to the performance of the Company. 

The Board had a policy of granting options to KMP with exercise prices at and/or above market share price (at time of agreement).  As such, incentive options granted to KMP would generally only be of benefit if the KMP performed to the level whereby the value of the Company increased sufficiently to warrant exercising the incentive options granted.

 

Other than service-based vesting conditions, there were no additional performance criteria on the incentive options granted to KMP, as given the speculative nature of the Group's activities and the small management team responsible for its running, it is considered the performance of the KMP and the performance and value of the Company were closely related.

 

Impact of Shareholder Wealth on Key Management Personnel Remuneration

 

During the Group's exploration and development phases of its business, the Board anticipates that the Company will retain future earnings (if any) and other cash resources for the operation and development of its business.  Accordingly the Company does not currently have a policy with respect to the payment of dividends and returns of capital. Therefore there was no relationship between the Board's policy for determining, or in relation to, the nature and amount of remuneration of KMP and dividends paid and returns of capital by the Company during the current and previous four financial years.

 

The Board does not directly base remuneration levels on the Company's share price or movement in the share price over the financial year and the previous four financial years.  Discretionary annual cash bonuses are based upon achieving various non-financial KPI as detailed under 'Performance Based Remuneration - Short Term Incentive' and are not based on share price or earnings. As noted above, a number of Key Management Personnel have also been granted Performance Rights and options, which generally will be of greater value should the value of the Company's shares increase (subject to vesting conditions being met), and in the case of options, increase sufficiently to warrant exercising the incentive options granted.

 

Impact of Earnings on Key Management Personnel Remuneration

 

As discussed above, the Group is currently undertaking exploration and development activities, and does not expect to be undertaking profitable operations until sometime after the successful commercialisation, production and sales of commodities from one or more of its current projects.

 

Accordingly the Board does not consider earnings during the current and previous four financial years when determining, and in relation to, the nature and amount of remuneration of KMP.

 

Remuneration Policy for Non-Executive Directors

 

The Board policy is to remunerate Non-Executive Directors at market rates for comparable companies for time, commitment and responsibilities. Given the current size, nature and risks of the Company, incentive options have been used to attract and retain Non-Executive Directors.  The Board determines payments to the Non-Executive Directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required.

 

The maximum aggregate amount of fees that can be paid to Non-Executive Directors is subject to approval by shareholders at a General Meeting.  Fees for Non-Executive Directors are not linked to the performance of the economic entity.  However, to align Directors' interests with shareholder interests, the Directors are encouraged to hold shares in the Company and Non-Executive Directors have received Performance Rights and incentive options in order to secure their services and as a key component of their remuneration.

 

General

 

Where required, KMP receive superannuation contributions (or foreign equivalent), currently equal to 9.5% of their salary, and do not receive any other retirement benefit.  From time to time, some individuals have chosen to sacrifice part of their salary to increase payments towards superannuation.

 

All remuneration paid to KMP is valued at cost to the company and expensed.  Incentive options are valued using the Binomial option valuation methodology and validated by the Black Scholes option pricing model. The value of these incentive options is expensed over the vesting period. The fair value of the Performance Rights granted is estimated as at the date of grant using the seven day volume weighted average share price prior to issuance. The value of the Performance Right is expensed over the vesting period.

 

Key Management Personnel Remuneration

 

Details of the nature and amount of each element of the remuneration of each Director and other KMP of the Company or Group for the financial year are as follows:

 


Short-term Benefits




Percentage


2015

Salary & Fees
$

Post Employ-ment Benefits
$

Cash Bonus
$

Share-Based Payments
$

Other Non-Cash Benefits(5)
$

Total
$

of Total Remunerat-ion that Consists of Options/ Rights
%

Percent-age Perform-ance Related
%

Directors









Ian Middlemas

50,000

-

-

-

-

50,000

-

-

Paul Atherley(1)

-

-

-

438,667

-

438,667

100.00

100.00

James Ross

50,000

-

-

(2,189)

-

47,811

(4.58)

(4.58)

Robert Behets(2)

198,200

-

-

(5,254)

-

192,946

(2.72)

(2.72)

Other KMP









Francisco Bellón del Rosal

276,620

19,190

28,740

203,809

46,289

574,648

35.47

40.47

Javier Colilla Peletero

276,614

17,037

28,740

215,500

30,156

568,047

37.94

43.00

Hugo Schumann(3)

-

-

-

34,063

-

34,063

100.00

100.00

Clint McGhie(4)

-

-

-

(3,941)

-

(3,941)

100.00

100.00

Total

851,434

36,227

57,480

880,655

76,445

1,902,241



Notes

 

(1)            Mr Atherley was appointed a Director with effect from 1 July 2015. In accordance with the terms of the consultancy deed with North Asia Metals Limited ('NAML') under which Mr Atherley is engaged, NAML was granted 4,000,000 incentive options on 16 June 2015 (vesting on commencement);

(2)            Mr Behets received Directors fees of $50,000 and consulting fees of $148,200 for additional services provided to the Company;

(3)            Mr Schumann commenced his role as Corporate Manager on 1 July 2015. He has previously provided assistance with investor relations in a non-executive capacity and had been granted Performance Rights in the year ended 30 June 2014. Mr Schumann was granted 200,000 incentive options on 15 June 2015;

(4)            Mr McGhie provides services as the Company Secretary and Chief Financial Officer through a services agreement between Berkeley and Apollo Group Pty Ltd.  Under the agreement, Apollo Group Pty Ltd was paid, or is payable $296,000 (2014: $288,000) for the provision of administrative, company secretarial and accounting services, and the provision of a fully serviced office to the Company. With effect from 1 July 2015, the retainer payable to Apollo Group Pty Ltd for the provision of these services has reduced to $20,000 per month; and

(5)            Other Non-Cash Benefits includes payments made for housing and car benefits.

 


Short-term Benefits




Percentage


2014

Salary & Fees
$

Post Employ-ment Benefits
$

Cash Bonus
$

Share-Based Payments
$

Other Non-Cash Benefits(3)
$

Total
$

of Total Remunerat-ion that Consists of Options/ Rights
%

Percent-age Perform-ance Related
%

Directors









Ian Middlemas

50,000

-

-

-

-

50,000

-

-

James Ross

50,000

-

-

59,235

-

109,235

54.23

54.23

Robert Behets(1)

253,400

-

-

142,163

-

395,563

35.94

35.94

Other KMP









Francisco Bellón del Rosal

280,774

19,710

36,944

113,383

47,776

498,587

22.74

30.15

Javier Colilla Peletero

280,768

17,520

36,944

152,902

17,028

505,162

30.27

37.58

Clint McGhie(2)

-

-

-

106,623

-

106,623

100.00

100.00

Total

914,942

37,230

73,888

574,306

64,804

1,665,170



Notes

 

(1)            Mr Behets received Directors fees of $50,000 and consulting fees of $203,400 for additional services provided to  the company;

(2)            Mr McGhie provides services as the Company Secretary and Chief Financial Officer through a services agreement between Berkeley and Apollo Group Pty Ltd. Under the agreement, Apollo Group Pty Ltd was paid, or was payable $288,000 (2013: $288,000) for the provision of administrative, company secretarial and accounting services, and the provision of a fully serviced office; and

(3)            Other Non-Cash Benefits includes payments made for housing and car benefits.

Options and Performance Rights Granted to KMP

Details of Unlisted Options and Performance Rights granted by the Company to each Key Management Personnel of the Group during the year ended 30 June 2015 are as follows:

 

2015

Options / Rights(1)

Grant
Date

Expiry
Date

Exercise Price

Grant Date Fair Value
$

No. Granted

Total Value of Options / Rights Granted

$

No. Vested at 30 June 2015

Directors









Paul Atherley

Options

16-Jun-15

30-Jun-18

£0.15

0.117

2,000,000

234,000

-

Paul Atherley

Options

16-Jun-15

30-Jun-19

£0.20

0.118

2,000,000

236,000

-

Other KMP









Francisco Bellón
del Rosal

Options

15-Jun-15

30-Jun-18

£0.15

0.117

750,000

87,750

750,000

Francisco Bellón
del Rosal

Options

15-Jun-15

30-Jun-19

£0.20

0.119

750,000

89,250

750,000

Javier Colilla Peletero

Options

15-Jun-15

30-Jun-18

£0.15

0.117

750,000

87,750

750,000

Javier Colilla Peletero

Options

15-Jun-15

30-Jun-19

£0.20

0.119

750,000

89,250

750,000

Hugo Schumann

Options

15-Jun-15

30-Jun-18

£0.15

0.117

100,000

11,700

100,000

Hugo Schumann

Options

15-Jun-15

30-Jun-19

£0.20

0.119

100,000

11,900

100,000

Notes

(1)           For details on the valuation of the Unlisted Options and Performance Rights, including models and assumptions used, please refer to Note 17 to the financial statements.

There were no Unlisted Options or Performance Rights granted to Key Management Personnel during the year ended 30 June 2014.

 

Details of the value of options and rights granted, exercised or lapsed for each Key Management Person of the Company or Group during the financial year are as follows:

 

2015

Value of options / rights granted during the year(1)

$

Value of options / rights exercised during the year

$

Value of options / rights lapsed during the year

$

Value of options / rights included in remuneration for the year

$

Percentage of remuneration that consists of options / rights

%

Directors






Paul Atherley

470,000

-

-

438,667

100.00

James Ross

-

-

-(1)

(2,189)

(4.58)

Robert Behets

-

-

-(2)

(5,254)

(2.72)

Other KMP






Francisco Bellón del Rosal

177,000

-

-(3)

203,809

35.47

Javier Colilla Peletero

177,000

-

-(4)

215,500

37.94

Hugo Schumann

23,600

-

-(5)

34,063

100.00

Clint McGhie

-

-

-(6)

(3,941)

100.00

Notes

 

(1)           100,000 Performance Rights expired on 31 December 2014;

(2)           240,000 Performance Rights expired on 31 December 2014;

(3)           100,000 Performance Rights expired on 31 December 2014;

(4)           100,000 Performance Rights expired on 31 December 2014;

(5)           40,000 Performance Rights expired on 31 December 2014; and

(6)           180,000 Performance Rights expired on 31 December 2014.

 

2014

Value of options / rights granted during the year(1)

$

Value of options / rights exercised during the year

$

Value of options / rights lapsed during the year

$

Value of options / rights included in remuneration for the year

$

Percentage of remuneration that consists of options / rights

%

Directors






James Ross

-

25,230(1)

-

59,235

54.23

Robert Behets

-

60,552(1)

-

142,163

35.94

Other KMP






Francisco Bellón del Rosal

-

25,230(1)

-

113,383

22.74

Javier Colilla Peletero

-

25,230(1)

-(2)

152,902

30.27

Clint McGhie

-

45,414(1)

-

106,623

100.00

Notes

 

(1)           On 31 December 2013, Performance Rights expiring 30 June 2014 were exercised. The value of the Performance Rights exercised is calculated using the 5 day VWAP on 18 December 2013 ($0.2523), which was the date that the performance milestone was considered to be satisfied; and

(2)           1,000,000 Unlisted Options with an exercise price of $1.35 expired on 18 June 2014.

Employment Contracts with Directors and Executive Officers

Current Directors

Mr Ian Middlemas, Non-Executive Chairman, has a letter of appointment dated 29 June 2015 confirming the terms and conditions of his appointment. Effective from 1 July 2013, Mr Middlemas has received a fee of $50,000 per annum inclusive of superannuation.

Mr Paul Atherley, Managing Director, is engaged under a consultancy deed with North Asia Metals Ltd ('NAML') dated 16 June 2015. The agreement specifies the duties and obligations to be fulfilled by Mr Atherley as Managing Director. There is 12 month rolling term and either party may terminate with three months written notice. No amount is payable in the event of termination for material breach of contract, gross misconduct or neglect. NAML will receive an annual consultancy fee of £225,000 and will be eligible for an annual bonus of up to £125,000 to be paid upon successful completion of key performance indicators as determined by the Board of Directors.

Dr James Ross, Non-Executive Director, has a letter of appointment with Berkeley Energy Limited that was last updated on 29 June 2015. From 27 April 2012 to 30 June 2015, Dr Ross has received a fee of $50,000 per annum inclusive of superannuation. With effect from 1 July 2015, Dr Ross will receive a fee of $30,000 per annum inclusive of superannuation.

Mr Robert Behets, Non-Executive Director, has a letter of appointment dated 29 June 2015 confirming the terms and conditions of his appointment. From 27 April 2012 to 30 June 2015, Mr Behets has received a fee of $50,000 per annum inclusive of superannuation. With effect from 1 July 2015, Mr Behets will receive a fee of $30,000 per annum inclusive of superannuation. Mr Behets also has a services agreement with the Company dated 18 June 2012, which provides for a consultancy fee at the rate of $1,200 per day for management and technical services provided by Mr Behets. Either party may terminate the agreement without penalty or payment by giving 2 months' notice.

Current other KMP

Mr Francisco Bellón del Rosal, has a contract of employment dated 14 April 2011 and amended on 1 July 2011 and 13 January 2015. The contract specifies the duties and obligations to be fulfilled by the General Manager Operations. The contract has a rolling term and may be terminated by the Company giving 6 months' notice, or 12 months in the event of a change of control of the Company. In addition to the notice period, Mr Bellón will also be entitled to receive an amount equivalent to statutory unemployment benefits (approximately 25,000) and statutory severance benefits (equivalent to 45 days remuneration per year worked from 9 May 2011 to 11 February 2012, and 33 days remuneration per year worked from 12 February 2012 until termination). No amount is payable in the event of termination for neglect of duty or gross misconduct. Mr Bellón receives a fixed remuneration component of €190,000 per annum plus compulsory social security contributions regulated by Spanish law, as well as the provision of accommodation in Salamanca and a motor vehicle.

Mr Javier Colilla Peletero, has a contract of employment dated 1 July 2010 and amended on 12 December 2011 and 13 January 2015. The contract specifies the duties and obligations to be fulfilled by the Senior Vice President Corporate. The contract has a rolling term and may be terminated by the Company giving 6 months notice, or 12 months in the event of a change of control of the Company or if the position becomes redundant. In addition to the notice period, Mr Colilla will also be entitled to receive an amount equivalent to statutory unemployment benefits (approximately 25,000) and statutory severance benefits (equivalent to 45 days remuneration per year worked from 1 July 2010 to 11 February 2012, and 33 days remuneration per year worked from 12 February 2012 until termination). No amount is payable in the event of termination for neglect of duty or gross misconduct. Mr Colilla receives a fixed remuneration component of €190,000 per annum plus compulsory social security contributions regulated by Spanish law, as well as an allowance for the use of his private motor vehicle.

Mr Hugo Schumann, Corporate Manager, is engaged under a consultancy deed with Rand Resources Ltd ('Rand') dated 21 September 2015. The agreement specifies the duties and obligations to be fulfilled by Mr Schumann as Corporate Manager commencing 1 July 2015. The Company may terminate the agreement with three months written notice. No amount is payable in the event of termination for material breach of contract, gross misconduct or neglect. Rand will receive an annual consultancy fee of £75,000 and will be eligible for an annual bonus of up to £25,000 to be paid upon successful completion of key performance indicators as determined by the Managing Director and Board of Directors.

Equity instruments held by Key Management Personnel

Option and Performance Right holdings of Key Management Personnel

2015

Held at
1 July 2014

Granted as Compen-sation

Options exercised/ Rights Converted

Net Other Changes

Held at
30 June 2015

Vested and exercise-able at 30 June 2015

Directors







Ian Middlemas

4,000,000

-

-

-

4,000,000

4,000,000

Paul Atherley(2)

-

4,000,000

-

-

4,000,000

-

James Ross

300,000

-

-

(100,000)(1)

200,000

-

Robert Behets

1,720,000

-

-

(240,000)(1)

1,480,000

1,000,000

Executives







Francisco Bellón del Rosal

1,550,000

1,500,000

-

(100,000)(1)

2,950,000

2,500,000

Javier Colilla Peletero

1,300,000

1,500,000

-

(100,000)(1)

2,700,000

2,250,000

Hugo Schumann(3)

150,000

200,000

-

(40,000)(1)

310,000

200,000

Clint McGhie

540,000

-

-

(180,000)(1)

360,000

-

 

Notes

(1)           Performance Rights expired 31 December 2014;

(2)           Mr Atherley was appointed a Director with effect from 1 July 2015. In accordance with the terms of the consultancy deed with North Asia Metals Limited ('NAML') under which Mr Atherley is engaged, NAML was granted 4,000,000 incentive options on 16 June 2015 (vesting on commencement);

(3)           Mr Schumann commenced his role as Corporate Manager on 1 July 2015. He has previously provided assistance with investor relations in a non-executive capacity and had been granted Performance Rights in the year ended 30 June 2014.

Shareholdings of Key Management Personnel

 

2015

Held at
1 July 2014

Granted as Compen-sation

Options exercised / Rights converted

Net Other Changes

Held at
30 June 2015

Directors




Ian Middlemas

5,300,000

-

-

-

5,300,000

Paul Atherley

854,000(1)

-

-

-

854,000

James Ross

415,000

-

-

-

415,000

Robert Behets

1,240,000

-

-

-

1,240,000

Executives




Francisco Bellón del Rosal

203,200

-

-

-

203,200

Javier Colilla Peletero

450,000

-

-

-

450,000

Hugo Schumann

-(2)

-

-

-

-

Clint McGhie

180,000

-


-

180,000

Notes

(1)           Mr Atherley was appointed a Director with effect from 1 July 2015. Mr Atherley's holding is as at the date of the Consultancy Deed (16 June 2015) under which he is employed as Managing Director;

(2)           Mr Schumann commenced his role as Corporate Manager on 1 July 2015.

Loans from Key Management Personnel

No loans were provided to or received from KMP during the year ended 30 June 2015 (2014: Nil). 

End of Remuneration Report.

AUDITOR'S AND OFFICERS' INDEMNITIES AND INSURANCE

Under the Constitution the Company is obliged, to the extent permitted by law, to indemnify an officer (including Directors) of the Company against liabilities incurred by the officer in that capacity, against costs and expenses incurred by the officer in successfully defending civil or criminal proceedings, and against any liability which arises out of conduct not involving a lack of good faith.

During the financial year, the Company has paid an insurance premium to insure Directors and officers of the Company against certain liabilities arising out of their conduct while acting as a Director or Officer of the Company. The net premium paid was $10,644 (2014: $17,472).  Under the terms and conditions of the insurance contract, the nature of liabilities insured against cannot be disclosed.

The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify an auditor of the Company or of any related body corporate against any liability incurred.

NON-AUDIT SERVICES

There were no non-audit services provided by the auditor (or by another person or firm on the auditor's behalf) during the financial year.

AUDITOR'S INDEPENDENCE DECLARATION

The auditor's independence declaration is on page 66 of the Annual Financial Report.

 

This report is made in accordance with a resolution of the Directors made pursuant to section 298(2) of the Corporations Act 2001.

For and on behalf of the Directors

 

 

 

 

 

PAUL ATHERLEY

Managing Director

 

25 September 2015

 

 

Competent Persons Statement

The information in this report that relates to 2014 Exploration Results for Zona 7 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.berkeleyenergy.com. The information in the original ASX Announcements 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 Energy 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 announcement that relates to the 2015 Exploration Results for Zona 7 is extracted from the report entitled 'Drilling Confirms Broad High Grade Mineralisation at Zona 7' dated 1 September 2015 which is available to view on Berkeley's website at www.berkeleyenergy.com. The information in the original ASX Announcement that relate to the 2015 Exploration Results is 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 independent of Berkeley and Director of Maja Mining Limited, an independent consultancy based in the UK. 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. 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 announcements.

The information in this report that relates to the 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.berkeleyenergy.com. 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 2015 Exploration Results and Mineral Resources for Retortillo is extracted from the report entitled 'March 2015 Quarterly Report' dated 29 April 2015 and is available to view on Berkeley's website at www.berkeleyenergy.com. The information in the original ASX Announcement that relates to the 2015 Exploration Results and Mineral Resources for Retortillo 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 the 2015 Metallurgical Testwork Results for Zona 7 is extracted from the report entitled 'Impressive Metallurgical Testwork Results on Zona 7' dated 8 September 2015 which is available to view on Berkeley's website at www.berkeleyenergy.com. The information in the original ASX Announcement is based on information compiled by Mintek under the supervision of Mr David Dodd, who is a Fellow of the Southern African Institute of Mining and Metallurgy. Mr Dodd is independent of Berkeley and is an independent consulting metallurgist affiliated to MDM Engineering Limited an independent engineering company based in South Africa. Mr Dodd has sufficient experience which is relevant to metallurgical processing of 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.

 

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.

 

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2015

 


Note

2015
$

2014
$





Revenue from continuing operations

2

588,829

1,163,371





Corporate and administration expenses


(894,444)

(996,652)

Exploration and evaluation expenses


(6,677,550)

(6,935,123)

Business Development


(15,965)

-

Share-based payments

3(b)

(866,475)

(809,174)

Loss before income tax benefit/ (expense)


(7,865,605)

(7,577,578)

Income tax benefit/ (expense)

4

-

43,630

Loss after income tax benefit/ (expense)


(7,865,605)

(7,533,948)





Other Comprehensive Income, net of income tax




Items that will not be reclassified subsequently to profit or loss


-

 -

Items that may be classified subsequently to profit or loss




Exchange differences arising on translation of foreign operations


(44,343)

172,516

Other Comprehensive Income, net of income tax


(44,343)

172,516

Total Comprehensive Loss for the year


(7,909,948)

(7,361,432)





Loss attributable to Members of Berkeley Energy Limited


(7,865,605)

(7,533,948)

Total comprehensive loss attributable to Members of Berkeley Energy Limited


(7,909,948)

(7,361,432)





Earnings per share




Basic loss per share from continuing operations

(cents per share)

21(a)

(4.36)

(4.19)

Diluted loss per share from continuing operations (cents per share)

21(b)

(4.36)

(4.19)

 

The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2015

 


Note

2014
$

2014
$

ASSETS




Current Assets




Cash and cash equivalents

22(b)

13,398,617

20,245,401

Trade and other receivables

5

479,485

549,183

Total Current Assets


13,878,102

20,794,584





Non-current Assets




Exploration expenditure

6

14,257,110

14,268,990

Property, plant and equipment

7

1,661,785

1,785,251

Other financial assets

8

65,113

132,003

Total Non-current Assets


15,984,008

16,186,244





TOTAL ASSETS


29,862,110

36,980,828





LIABILITIES




Current Liabilities




Trade and other payables

9

1,033,297

1,130,791

Other financial liabilities

10

290,278

268,029

Total Current Liabilities


1,323,575

1,398,820





TOTAL LIABILITIES


1,323,575

1,398,820





NET ASSETS


28,538,535

35,582,008





EQUITY




Equity attributable to equity holders of the Company




Issued capital

11

119,358,591

119,358,591

Reserves

12

(358,207)

(1,180,339)

Accumulated losses

13

(90,461,849)

(82,596,244)





TOTAL EQUITY


28,538,535

35,582,008

 

The above Statement of Financial Position should be read in conjunction with the accompanying Notes

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2015

 


Note

2015
$

2014
$





Cash flows from operating activities




Payments to suppliers and employees


(7,475,512)

(8,368,242)

Interest received


596,944

721,588

Rebates received


58,592

338,074

Net cash outflow from operating activities

22(a)

(6,819,976)

(7,308,580)





Cash flows from investing activities




Exploration acquisition costs


(4,575)

(108,118)

Payments for property, plant and equipment


(59,685)

(74,177)

Net cash outflow from investing activities


(64,260)

(182,295)





Cash flows from financing activities




Transaction costs from issue of securities


-

(2,334)

Net cash inflow/(outflow) from financing activities


-

(2,334)





Net decrease in cash and cash equivalents held


(6,884,236)

(7,493,209)

Cash and cash equivalents at the beginning of the financial year


20,245,401

27,736,790





Effects of exchange rate changes on cash and cash equivalents


37,452

1,820

Cash and cash equivalents at the end of the financial year

22(b)

13,398,617

20,245,401

 

The above Statement of Cash Flows should be read in conjunction with the accompanying Notes

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2015

 


Issued Capital


$

Share Based Payments Reserve

$

Foreign Currency Translation Reserve
$

Accumulated

Losses

$

Total Equity


$

As at 1 July 2014

119,358,591

1,240,193

(2,420,532)

(82,596,244)

35,582,008

Net loss for the year

-

-

-

(7,865,605)

(7,865,605)

Other Comprehensive Income:

Exchange differences arising on translation of foreign operations

-

-

(44,343)

-

(44,343)

Total comprehensive loss

-

-

(44,343)

(7,865,605)

(7,909,948)

Transactions with owners, recorded directly in equity:






Cost of share based payments

-

866,475

-

-

866,475

As at 30 June 2015

119,358,591

2,106,668

(2,464,875)

(90,461,849)

28,538,535

 

 


Issued Capital


$

Share Based Payments Reserve

$

Foreign Currency Translation Reserve
$

Accumulated

Losses

$

Total Equity


$

As at 1 July 2013

 119,061,813

2,623,721

(2,593,048)

(76,955,886)

 42,136,600

Net loss for the year

-

-

-

(7,533,948)

(7,533,948)

Other Comprehensive Income:

Exchange differences arising on translation of foreign operations

-

-

172,516

-

172,516

Total comprehensive loss

-

-

172,516

(7,533,948)

(7,361,432)

Transactions with owners, recorded directly in equity:






Conversion of Performance Rights

299,112

(299,112)

-

-

-

Adjustment for expired options

-

(1,893,590)

-

1,893,590

-

Cost of share based payments

-

809,174

-

-

809,174

Share Issue costs

(2,334)

-

-

-

(2,334)

As at 30 June 2014

119,358,591

1,240,193

(2,420,532)

(82,596,244)

35,582,008

 

The above Statement of Changes in Equity should be read in conjunction with the accompanying Notes

 

 

The following sections are available in the full version of the Annual Financial Report on Berkeley Energy Limited's website:   www.berkeleyenergy.com

 

Notes to and forming part of the Financial Statements


Directors' Declaration


Auditor's Independence Declaration


Independent Auditor's Report


 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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