REG - Berkeley Energia - DFS confirms Salamanca as a low cost producer <Origin Href="QuoteRef">BKY.AX</Origin> - Part 11
14/07/2016 07:36
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increased selectivity at the 200 ppm grade cut-off.No mining production has taken
place at Retortillo.
The assumptions made regarding recovery of by-products. The resource model only estimates uranium.
Estimation of deleterious elements or other non-grade variables of economic significance (eg sulphur for acid mine drainage characterisation). At this stage, there are no deleterious elements or other non-grade variables identified as being of economic significance at
Retortillo.
In the case of block model interpolation, the block size in relation to the average sample spacing and the search employed. The uranium grade is estimated into the 20m (X) by 20m (Y) by 6m (Z) blocks. This compares to the average drill spacing of 35m
by 35m in X and Y and an assumed mining bench height of 6m. UC and LUC were applied to the model based on PFS designed mining
selectivity at a block size of 5m x 5m x 6m.
Any assumptions behind modelling of selective mining units. Selective mining unit dimensions are based on using a blasting and sampling pattern which is around 5m x 5m combined with open
pit mining equipment suitable for controlled excavation on a 3 to 6m mining flitch height, using 125 tonnes backhoe excavators
and 100 tonne dump trucks.
Any assumptions about correlation between variables. Uranium is the only economic metals estimated in the current resource model.
Description of how the geological interpretation was used to control the resource estimates. Geological interpretation controlled the volume of the resource estimate by restricting the interpretation of the mineralisation
volume and associated samples to material with continuity above a nominal 40ppm U3O8 grade.The domains are based on geology,
structure and uranium grade with defined zones of mineralisation that show continuity along and across strike.A further division
of the model into completely weathered, partially weathered and fresh rock is applied by triangulated surfaces interpreted from
the logging of the drill samples. This division is only applied for density purposes. There is no relationship or boundary
effect between mineralisation and grade and weathering intensity.
Discussion of basis for using or not using grade cutting or capping. Uranium grade distribution exhibits a strong positive skewness, so a top cut was applied to reduce local bias by extreme grades
outliers - nominally approximating the 97.5 population percentile. The domains were assessed independently and a top cut grade
was determined for each domain.
The process of validation, the checking process used, the comparison of model data to drill hole data, and use of reconciliation data if available. Validation of the MRE included visual inspection of the grade distribution compared to the drill data, comparison of block model
statistics to the sample statistics and generation of swath plots. These confirmed that the MRE appropriately represents the
grade and tonnage distribution of the uranium mineralisation at the confidence levels reported. A detailed review of the
mineralisation domains, drilling data and resultant grade model using Datamine software was completed by the CP, which compared
favourably with the estimate completed using Surpac and Isatis software.
Moisture Whether the tonnages are estimated on a dry basis or with natural moisture, and the method of determination of the moisture content. The resource tonnage is reported on a dry bulk density basis. In-situ dry bulk density measurements were completed on dry core
and on RC material using a solid-fluid pycnometer. Results were corrected for moisture content. Sample grades are reported using
dry weight.
Cut-off parameters The basis of the adopted cut-off grade(s) or quality parameters applied. The MRE has been reported using a 200ppm U3O8 cut-off grade. The Salamanca Project PFS demonstrated that a ~100ppm U3O8 cut-off
is economic. Based on the current uranium market, reporting of the MRE at a 200ppm cut-off grade is both justifiable and
consistent with previous published MRE's for this style of mineralisation.
Mining factors or assumptions Assumptions made regarding possible mining methods, minimum mining dimensions and internal (or, if applicable, external) mining dilution. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential mining methods, but the assumptions made regarding mining methods and parameters when estimating Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the mining assumptions made. The PFS demonstrated that the Retortillo resource can potentially be extracted using open pit mining methods, with the recovery
of uranium through the application of acid heap leach methods.Indicative parameters used for pit optimisation purposes
were:Uranium selling price: US$65/lb U3O8, Total Mining Cost: US$14.5/lb U3O8Mining recovery: 95%Mining dilution: 4%Plant
Process Cost: US$12.8/lb U3O8Recovery U3O8: 85%Royalties: 1.2%
Metallurgical factors or assumptions The basis for assumptions or predictions regarding metallurgical amenability. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential metallurgical methods, but the assumptions regarding metallurgical treatment processes and parameters made when reporting Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the metallurgical assumptions made. Berkeley has completed a number of metallurgical testwork programs for Retortillo as part of the scoping, PFS and definitive
feasibility studies, including column leach tests at commercial height (6m). These tests have shown that heap leaching can
achieve uranium recoveries of at least 85%.
Environmen-tal factors or assumptions Assumptions made regarding possible waste and process residue disposal options. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider the potential environmental impacts of the mining and processing operation. While at this stage the determination of potential environmental impacts, particularly for a greenfields project, may not always be well advanced, the status of early consideration of these potential environmental impacts should be reported. Where these aspects have not been considered this should be reported with an explanation of the environmental assumptions made. Berkeley was granted a Favourable Declaration of Environmental Impact ('Environmental Licence') for Retortillo in October 2013
following submission of the Company's Environmental and Social Impact Assessment ('ESIA')together with the Exploitation Plan and
the Reclamation and Closure Plan.The Company's waste management and rehabilitation assumptions were detailed in the ESIA
andReclamation and Closure Plan. Spent ore from the on-off heap leach pads ('ripios') will initially be stored on the heap leach
pads and subsequently backfilled into isolated and lined (clay layer and HDPE liner) areas within the mined pits on a continuous
basis once sufficient space is available.Acid Rock Drainage (ARD) and Natural Occurring Radioactive Materials (NORM) waste will
be placed onto temporary dumps designed with the required isolation system (clay layer and HDPE liner) until the waste is
backfilled into the mined pits towards the end of the mine life. At the end of the mine life, the entire volume of ripios, ARD
and NORM waste will be fully encapsulated within the mined pits, and the surface rehabilitated as per the existing profile and
vegetation.
Bulk density Whether assumed or determined. If assumed, the basis for the assumptions. If determined, the method used, whether wet or dry, the frequency of the measurements, the nature, size and representativeness of the samples. Bulk density values were derived from 477 core and solid fluid pycnometer measurements.The in-situ dry bulk density values are:
· Completely weathered: 2.28g/cm3· Partially weathered: 2.39g/cm3· Fresh rock: 2.62g/cm3
The bulk density for bulk material must have been measured by methods that adequately account for void spaces (vugs, porosity, etc), moisture and differences between rock and alteration zones within the deposit. Fresh and slightly weathered rock is competent enough to ensure the method used takes into account any rock porosity. A factor
derived from comparison with DD core was used to adjust the weathered material.
Discuss assumptions for bulk density estimates used in the evaluation process of the different materials. The density measurements have been classified by weathering intensity, defined by the geological logging. Three dominant zones
have been identified - completely weathered, partially weathered and fresh rock. The average of the density data from each zone
was applied in the resource model.
Classification The basis for the classification of the Mineral Resources into varying confidence categories. The reported MRE has been classified as Measured, Indicated or Inferred after consideration of the following:· Adequate
geological evidence and drill hole sampling is available to imply geological and grade continuity.· Adequate in-situ dry
bulk density data is available to estimate appropriate tonnage factors.· Adequate mining, metallurgy and processing
knowledge to imply potential prospect for eventual economic extraction.
Whether appropriate account has been taken of all relevant factors (ie relative confidence in tonnage/grade estimations, reliability of input data, confidence in continuity of geology and metal values, quality, quantity and distribution of the data). The reported MRE has been classified with consideration of the quality and reliability of the raw data, the confidence of the
geological interpretation, the number and spacing of intercepts through the mineralised zones and knowledge of grade continuity
gained from observation and geostatistical analysis.
Whether the result appropriately reflects the Competent Person's view of the deposit. The reported MRE and its classification are consistent with the CP's view of the deposit. The CP was responsible for determining
the resource classification.
Audits or reviews The results of any audits or reviews of Mineral Resource estimates. An external review was undertaken by SRK on the MRE reported in July 2012. The review concluded that the estimate was considered
to reflect the understanding of the geology and grade continuity. Malcolm Titley (Geology Consultant, Maja Mining Limited)
reviewed this and the previous MRE reported in April 2015 and concluded that the estimates appropriately represented the grade
and tonnage distribution of uranium mineralisation at confidence levels commensurate with the reported resource classification.
Discussion of relative accuracy/ confidence Where appropriate a statement of the relative accuracy and confidence level in the Mineral Resource estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the resource within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors that could affect the relative accuracy and confidence of the estimate. The confidence level is reflected in the resource classification category chosen for the reported MRE.The definition of current
Mineral Resources is appropriate for the level of study and the geological confidence imparted by the drilling grid.The reported
MRE is considered appropriate and representative of the grade and tonnage at the 200ppm U3O8 cut-off grade. The application of
geostatistical methods has helped to increase the confidence of the model and quantify the relative accuracy of the resource on
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