Annual Report to shareholders

BERKELEY ENERGIA LIMITED

2021

ANNUAL REPORT | INFORME ANUAL

ABN 40 052 468 569

CORPORATE DIRECTORY | DIRECTORIO CORPORATIVO

The Company also advises that an Appendix 4G (Key to Disclosures: Corporate Governance Council Principles and Recommendations) and 2021 Corporate Governance Statement have been released today and are also available on the Company's website.

For further information please contact:

Robert Behets                                                Dylan Browne          

Acting Managing Director                              CFO and Company Secretary

+61 8 9322 6322

[email protected]

The Directors of Berkeley Energia Limited submit their report on the Consolidated Entity consisting of Berkeley Energia Limited ("Company" or "Berkeley" or "Parent") and the entities it controlled at the end of, or during, the year ended 30 June 2021 ("Consolidated Entity" or "Group").

OPERATING AND FINANCIAL REVIEW

Summary

Summary for and subsequent to the year end include:

·       Permitting:

Subsequent to the end of the year, Berkeley reported that the Board of the Nuclear Safety Council ("NSC") had issued an unfavourable report for the grant of the Authorisation for Construction for the uranium concentrate plant as a radioactive facility ("NSC II").

The Company has however taken steps to overturn the NSC II decision following the submission of an 'Improvement Report' to supplement the Company's initial NSC II Application, along with the corresponding arguments that address all of the issues raised by the NSC, and has requested its reassessment by the NSC. The Improvement Report includes technical arguments that, in the Company's view, clearly demonstrate that the project is compliant with all requirements for NSC II.

Berkeley also submitted further documentation to the Ministry for the Ecological Transition and the Demographic Challenge ("MITECO") in which the Company, with strongly supported arguments, dismantles all of the technical issues used by the NSC as justification to issue the unfavourable report.

The Company strongly refutes the NSCs assessment and believes that the project is compliant with all requirements for NSC II to be awarded however, the NSC still adopted an unfavourable decision. In the Company's opinion therefore, the technical issues raised by the NSC lack both technical and legal support.

Berkeley's new documentation has been submitted to MITECO, as part of the previously disclosed hearing process in relation to the unfavorable NSC II decision, prior to the deadline for submissions. The Company is yet to receive a response from MITECO regarding its submissions.

It should also be noted that more than 120 previous permits and favourable reports have been granted by the relevant authorities at the local, regional, federal and European Union levels in relation to the Salamanca project, among which nine have been from the NSC.

The Company will continue to strongly defend its position in relation to the adverse decision by the NSC and will continue to update the market on any material developments as they occur.

·       Sustainability:

During the year, Berkeley published its first annual Sustainability Report, a voluntary transparency initiative through which the Company has communicated information regarding its management systems in the areas of health, safety, environmental protection and social responsibility, as well as its performance in sustainability, to all stakeholders.

·       Uranium Market:

The uranium spot price closed the year at US$32.10 per pound with spot market activity decreasing in June 2021 which had a total of 4.4 million pounds transacted, compared to 6.4 million pounds in May 2021.

Activity in the uranium term market increased somewhat towards the end of the year as new demand emerged from a U.S. utility seeking slightly more than 1.1 million pounds for delivery in 2022-2025.

·       Uranium Market:

UxC reported that "Other activity continues in the market as several utilities have been in discussions with potential suppliers or evaluating unsolicited offers".

·       Spanish Regulatory Regime:

During the year, a meeting of the full Parliament in Spain ("Parliament") approved an amendment to the draft climate change and energy transition bill relating to the investigation and exploitation of radioactive minerals (e.g. uranium).

The Parliament reviewed and approved the amendment ("Article 10"), the text of which remained unchanged from the modified amendment proposed by the Ecological Transition Ponencia ("Ponencia") in February 2021 and subsequently approved by the Commission of Ecological Transition of the Parliament ("Commission") and the Spanish Senate.

Under this amendment:

·     New applications for exploration, investigation or direct exploitation concessions for radioactive materials, nor their extensions, would not be accepted as of the entry into force of this law.

·     Existing concessions, and open proceedings and applications related to these, would continue as per normal based on the current legislation.

Article 10 establishes that "As of the entry into force of this law, no new applications will be accepted for the granting of exploration permits, investigation permits or direct exploitation concessions, nor their extensions, regulated under Law 22/1973, of July 21, on mines of radioactive minerals, as defined in Law 25/1964, of April 29, on nuclear energy, when such resources are extracted for their radioactive, fissile or fertile properties. In addition, applications for the authorisation of new radioactive facilities of the nuclear fuel cycle for the processing of radioactive minerals, as defined in the Regulation on nuclear and radioactive facilities, will no longer be accepted." Importantly, existing rights for exploration, investigation and exploitation concessions would remain in force during their validity period. Existing proceedings underway would also continue under the legal framework set up by the current regulations.

With the final approval of the Parliament, the review process associated with proposed amendments to the draft climate change and energy transition bill has now been completed, and the new law entered into force following its publication in the Official Spanish State Gazette in May 2021.

Operations

Project Update

In December 2020, the Company was selected as the winner of the Outstanding Contribution to Sustainable Mining - Europe category in the 2020 CFI.co Sustainability Awards.

The CFI.co Sustainability Awards seek to recognise the best responses to sustainability issues by country or region, identifying companies that stand out as examples to others across the world.

The CFI.co award selection panel uses a wide range of criteria to help inform decisions regarding the awards, in order to identify top performing companies not based on the size of the nominated organisation but rather on its excellence in sustainability.

Berkeley is extremely pleased to be recognised for its efforts in key area of Sustainable Mining. The Company's Salamanca mine is being developed to the highest international standards and the Company's commitment to health, safety and the environment is a priority. The Company currently holds certificates in Sustainable Mining (UNE 22470-80), Environmental Management (ISO 14001), and Health and Safety (ISO 45001) which were awarded by AENOR, an independent Spanish government agency.

These management systems ensure that Company procedures are compliant with current regulations, ensure that the environment is protected, the project is sustainable, and that all activities are carried out with respect for and in collaboration with the local communities.

During the year, Berkeley published its first Sustainability Report, a voluntary transparency initiative through which the Company openly communicates information regarding its management systems in the areas of health, safety, environmental protection and social responsibility, as well as its performance in sustainability, to all stakeholders.

The Sustainability Report, which provides a detailed overview of environmental, social and governance ("ESG") activities over the 12-month period to 31 December 2020, has been distributed to key stakeholders. The Sustainability Report can also be accessed and downloaded from the Company's website at www.berekleyenergia.com.

The Company also strives to uphold the United Nation's Sustainable Development Goals ("SDGs"). A detailed review of the Company's business strategy and activities in Spain has recently been conducted, with the objective of evaluating the real contribution that has been made in 2020 through Berkeley's program of objectives and improvements implemented in terms of sustainability.

The Company's performance against key indicators and targets during 2019/2020 demonstrated that significant improvement had been achieved, including a 63% reduction in fuel consumption, a 28% reduction in energy consumption, a 50% reduction in water consumption, a 85% reduction in paper consumption, and a 49% reduction in CO₂ emissions. The Company notes that its 'work from home' policy which was maintained for much of 2020 has positively impacted the 2020 data however, a longer-term trend of continuous improvement is clearly evident.

In terms of social development, with the aim of promoting participation with the stakeholders, the Company carried out a total of 39 participatory activities with the local communities during 2020.

Following on from the successful 2020 program, the Company has now approved the Sustainability Program for 2021. This plan takes into account the Berkeley's past performance and the findings of a risks and opportunities assessment undertaken as part of the planning process.

As part of the 2021 Program, a sustainable Eco-Garden initiative has been launched, with the objective of:

·      Promoting local socio-economic development;

·      Promoting the diversity of economic activities in the environment;

·      Providing food to those most in need; and

·      Promoting sustainable practices in agriculture.

Another initiative launched by the Company is the installation of a number of bee hives on Berkeley's property. The implementation of this activity through the agreement with one of the local producers, will constitute further proof of the compatibility of the mining activity with other business activities related to the environment.

In addition, the development of this activity represents yet another demonstration that Berkeley is contributing to the achievement of the SDGs, in this specific case SDGs number 1, 2, 8, 9 and 15.

Internal audits for the Environmental and Sustainable Management Systems have been successfully completed in June. The associated external audits by AENOR were successfully undertaken in late July.

Monitoring Programs

The monitoring programs associated with the NSC approved pre-operational Surveillance Plan for Radiological and Environmental Affections and pre-operational Surveillance Plan for the Control of the Underground Water continued during the year.

Exploration 

A regional exploration program which comprised soil sampling and ground radon gas concentration and exhalation rate survey covering four Investigation Permits (Castaños 2, Alcornoques, Barquilla and Conchas) was undertaken during the year. An assessment of this regional exploration program will be completed once all results are returned and interpreted.

Permitting Update

Subsequent to the end of the year, the Company reported that the Board of the NSC had issued an unfavourable report for the grant of the NSC II.

The Company has however taken steps to overturn the NSC II decision following the submission of an 'Improvement Report' to supplement the Company's initial NSC II Application, along with the corresponding arguments that address all of the issues raised by the NSC, and has requested its reassessment by the NSC. The Improvement Report is complemented by an Independent Expert's technical opinion on the hydrogeological aspects of the project produced by Prof. Rafael Fernández Rubio, Emeritus Professor of Hydrogeology at the Polytechnic University of Madrid. The Improvement Report includes technical arguments that, in the Company's view, will clearly demonstrate that the project is compliant with all requirements for NSC II.

Berkeley also submitted further documentation to the MITECO in which the Company, with strongly supported arguments, dismantles all of the technical issues used by the NSC as justification to issue the unfavourable report.

In addition, the Company has also requested from MITECO access to the files associated with the Authorisation for Construction and Authorisation for Dismantling and Closure for the radioactive facilities at La Haba (Badajoz) and Saelices El Chico (Salamanca), which are owned by ENUSA Industrias Avandas S.A., in order to verify and contrast the conditions approved by the competent administrative and regulatory bodies for other similar uranium projects in Spain.

The Company strongly refutes the NSCs assessment and believes that the project is compliant with all requirements for NSC II to be awarded however, the NSC still adopted an unfavourable decision. In the Company's opinion therefore, the technical issues raised by the NSC lack both technical and legal support.

Berkeley's new documentation has been submitted to MITECO, as part of the previously disclosed hearing process in relation to the unfavourable NSC II decision, prior to the deadline for submissions. The Company is yet to receive a response from MITECO regarding its submissions.

Since the commencement of the process in 2016, the NSC has to date held six meetings with the Company and on seven occasions requested additional information in relation to NSC II; which the Company promptly responded to with updated information. It is also important to note that, in the Company's view, a large part of the additional information requested in the process by the NSC related to the Authorisation for Operation for the uranium concentrate plant as a radioactive facility ("NSC III") which should only be dealt with following the award of NSC II. However, to ensure the process was conducted in a collaborative manner, the Company provided its responses to the NSC as requested.

It should also be noted that more than 120 previous permits and favourable reports have been granted by the relevant authorities at the local, regional, federal and European Union levels in relation to the Salamanca project, among which nine have been from the NSC.

The Company will continue to strongly defend its position in relation to the adverse decision by the NSC and will continue to update the market on any material developments as they occur.

Spanish Regulatory Regime Update:

During the year, a meeting of the of the Parliament approved an amendment to the draft climate change and energy transition bill relating to the investigation and exploitation of radioactive minerals (e.g. uranium).

The Parliament reviewed and approved the amendment Article 10, the text of which remained unchanged from the modified amendment proposed by the Ponencia in February 2021 and subsequently approved by the Commission and the Spanish Senate.

As previously reported by the Company, under this amendment:

New applications for exploration, investigation or direct exploitation concessions for radioactive materials, nor their extensions, would not be accepted as of the entry into force of this law.

Existing concessions, and open proceedings and applications related to these, would continue as per normal based on the current legislation.

Article 10 establishes that "As of the entry into force of this law, no new applications will be accepted for the granting of exploration permits, investigation permits or direct exploitation concessions, nor their extensions, regulated under Law 22/1973, of July 21, on mines of radioactive minerals, as defined in Law 25/1964, of April 29, on nuclear energy, when such resources are extracted for their radioactive, fissile or fertile properties. In addition, applications for the authorisation of new radioactive facilities of the nuclear fuel cycle for the processing of radioactive minerals, as defined in the Regulation on nuclear and radioactive facilities, will no longer be accepted."

Importantly, existing rights for exploration, investigation and exploitation concessions would remain in force during their validity period. Existing proceedings underway would also continue under the legal framework set up by the current regulations.

With the final approval of the Parliament, the review process associated with proposed amendments to the draft climate change and energy transition bill has now been completed, and the new law entered into force following its publication in the Official Spanish State Gazette in May 2021.

Uranium Market

The uranium spot price increased to close the year at US$32.10 per pound with spot market activity decreasing in June 2021 which had a total of 4.4 million pounds transacted, compared to 6.4 million pounds in May 2021.

Activity in the uranium term market increased somewhat as new demand emerged from a U.S. utility seeking slightly more than 1.1 million pounds for delivery in 2022-2025.

UxC reported that "Other activity continues in the market as several utilities have been in discussions with potential suppliers or evaluating unsolicited offers".

Despite the incremental uptick in activity, the UxC long-term price remained unchanged at US$32.00 per pound.

COVID-19

The ongoing nationwide state of emergency in Spain ended on 9 May 2021, with many restrictions being lifted including allowing restaurants to open again with limits of four people per table and indoor dining limited to 30% capacity.

However, many regional authorities continue to implement tighter restrictions including curfews at night and also their own entry and exit restrictions, permitting travel out of the locality for essential reasons only.

International entry restrictions remain in place, in particular for any travellers flying from locations where highly transmissible COVID-19 variants are in general circulation who are required to self-isolate for 10 days on arrival. Non-essential travel is permitted from EU countries and certain other non-EU countries except for travellers from Brazil, India, and South Africa (other than individuals who possess a certificate of vaccination confirming they have completed a full course of a COVID-19 vaccine authorised by the European Medicines Agency or World Health Organization no less than 14 days prior to entry). Travelers from the UK may also use a negative COVID-19 test no older than 48 hours to enter Spain for nonessential purposes, in addition to a vaccine certificate.

All of the Berkeley team based in Spain are safe and well. Consistent with current Government guidelines, the Company has continued its 'work from home' policy.

Corporate

On 25 November 2020, Mr Nigel Jones resigned as a Director of Berkeley following the completion of the Company's Annual General Meeting in November 2020. Mr Jones currently holds the position of Managing Director of the Simandou iron ore project and corporate governance policies at Rio Tinto did not allow Mr Jones to continue to sit on other publicly listed boards.

Results of Operations

The Consolidated Entity's net loss after tax for the year ended 30 June 2021 was $54,953,000 (2020:  $42,889,000). Significant items contributing to the year end loss and substantial differences from the previous year include the following:

(i)         Exploration and evaluation expenses of $5,328,000 (2020: $5,779,000), 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 and permitting for each separate area of interest.

(ii)        Business development expenses of $160,000 (2020: $983,000) which includes the Group's investor relations activities including but not limited to public relations costs, marketing and digital marketing, broker fees, travel costs, conference fees, business development consultant fees and stock exchange admission fees.

(iii)       Non-cash impairment expenses of $20,358,000 (2020: nil). Subsequent to the end of the year, Berkeley reported that the Board of the NSC had issued an unfavourable report for the grant of NSC II at the Salamanca project. The Company strongly refutes the NSCs assessment and believes that the project is compliant with all requirements for NSC II to be awarded. In the Company's opinion therefore, the technical issues raised by the NSC lack both technical and legal support.

Berkeley submitted documentation, including an 'Improvement Report' to supplement the Company's initial NSC II Application, along with the corresponding arguments that address all of the issues raised by the NSC, and a request for its reassessment by the NSC, to MITECO in late July. Further documentation was subsequently submitted to MITECO in which the Company, with strongly supported arguments, dismantles all of the technical issues used by the NSC as justification to issue the unfavourable report and restates its request for the NSC II Application be reassessed by the NSC.

The Company is yet to receive a response from MITECO regarding its submissions however, in accordance with the requisite accounting standards, the Company has written down its non-current assets in relation to the Salamanca project.

(iv)       Non-cash share-based payment expense of $186,000 (2020: expense of $62,000) was recognised in respect of incentive securities granted to directors, employees and key consultants. The Company's policy is to expense the incentive securities over the vesting period.

(v)        Non-cash fair value loss of $18,253,000 (2020: $41,116,000) of the convertible note and unlisted options issued to the Oman Investment Authority ("OIA") (the "OIA Options"). These financial liabilities increase or decrease in value as the share price of the Company fluctuates. During the year, the Company has determined that the convertible note will convert at the floor price of £0.27. This has resulted in a fair value loss for the year and contributed to the increase in the financial liability at 30 June 2021. As the convertible note and OIA Options convert into shares, the liabilities will be reclassified to equity and will require no cash settlement by the Company

Commercially, the intentions of both OIA and the Company prior to completing the convertible note transaction in 2017 was to enter into an equity arrangement. The Company has however complied with the accounting standards and accounted for the convertible note as a financial liability.

Under the ASX Listing Rules, the convertible note and OIA Options are defined as equity securities.

Due to the conversion terms of the convertible note leading to the issuance of a variable number of ordinary shares in the Company in return for conversion of the convertible note, the Company is required under the accounting standards to account for the convertible note as a current financial liability at fair value through profit and loss, despite the Company having no obligation to extinguish the convertible note using its cash resources.

(vi)       Recognition of interest income of $23,000 (2020: $1,480,000). The decrease in interest is a direct result of significantly lower interest rates being offered by the banks on USD term deposits due to current global market conditions and the impact of Covid-19; and

(vii)      Foreign exchange loss of $9,545,000 (2020: gain of $4,726,000) largely attributable on the US$53 million held in cash by the Group following the strengthening of the AUD against the USD by some 9% during the year.

Financial Position

At 30 June 2021, the Group is in a good financial position with cash reserves of $79,066,000 (2020: $91,767,000). With cash outflows during the year totalling from $5,691,000, there was a foreign exchange loss of $7,010,000 following the strengthening of the AUD against the USD by some 9% during the year.

The Group had net liabilities of $19,165,000 at 30 June 2021 (2020: net assets $36,211,000). This decrease is consistent with impairment of Salamanca assets discussed above, the increase in the value of the derivative financial liabilities (the convertible note and OIA Options) and the decrease in cash reserves. On the 30 November 2021, The OIA Convertible Note which will automatically convert resulting in the increase in share capital of the same amount increasing net assets to $73,785,000 (based on the 30 June 2021 financial position).

Business Strategies and Prospects for Future Financial Years

Berkeley's strategic objective is to create long-term shareholder value with the Company's primary focus continuing to be on progressing the approvals required to commence construction of the Salamanca mine and bring it into production.

To achieve its strategic objective, the Company currently has the following business strategies and prospects:

·      Continue to strongly defend its position in relation to the adverse decision by the NSC;

·      Continue to progress permitting and maintain the required licences to develop and operate at the Salamanca mine;

·      Advance the Salamanca mine through the development phase into the main construction phase and then into production;

·      Progress with seeking further offtake partners. The Company has maintained its preference to combine fixed and market related pricing across its contracts in order to secure positive margins in the early years of production whilst ensuring the Company remains exposed to potentially higher prices in the future; and

·      Assess other mine development opportunities at the Salamanca mine and other business development opportunities in the resources sector.

As with any other mining projects, 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 but are not limited to the following:

Mining licences and government approvals required - With the mining licence, environmental licence and the UL already obtained at the Salamanca mine, the only major approval to commence full construction at the Salamanca mine is NSC II.

Subsequent to the end of the year, Berkeley reported that the NSC had issued an unfavourable report for the grant of the NSC II.

The Company has however taken the first steps to overturn the NSC II decision following the submission of an 'Improvement Report' to supplement the Company's initial NSC II Application, along with the corresponding arguments that address all of the issues raised by the NSC, and has requested its reassessment by the NSC. The Improvement Report includes technical arguments that, in the Company's view, clearly demonstrate that the project is compliant with all requirements for NSC II.

Berkeley also submitted further documentation to MITECO in which the Company, with strongly supported arguments, dismantles all of the technical issues used by the NSC as justification to issue the unfavourable report.

Berkeley strongly refutes the NSC's assessment and notes that all documentation submitted by the Company in relation to NCS II has been prepared following advice from independent, nationally and internationally recognised advisors and consultants who are experts in their field.

Berkeley's new documentation has been submitted to MITECO, as part of the previously disclosed hearing process in relation to the unfavorable NSC II decision, prior to the deadline for submissions. The Company is yet to receive a response from MITECO regarding its submissions.

It should also be noted that more than 120 previous permits and favourable reports have been granted by the relevant authorities at the local, regional, federal and European Union levels in relation to the Salamanca project, among which nine have been from the NSC.

The Company will continue to strongly defend its position in relation to the adverse decision by the NSC however there remains a risk that the Company's updated documentation and Improvement Report may not be considered and NSCII is not awarded by MITECO.

Further, various appeals have also been made against other permits and approvals the Company has received for the Salamanca mine, as allowed for under Spanish law, and the Company expects that further appeals will be made against these and future authorisations and approvals in the ordinary course of events. Whilst none of these appeals have been finally determined, no precautionary or interim measures have been granted in relation to the appeals regarding the award of licences and authorisations at the Salamanca mine to date.

However, the successful development of the Salamanca mine will be dependent on the granting of all permits and licences necessary for the construction and production phases, in particular the award NSC II which will allow for the construction of the plant as a radioactive facility.

However, with any development project, there is no guarantee that the Company will be successful in applying for and maintaining all required permits and licences to complete construction and subsequently enter into production. If the required permits and licences are not obtained, then this could have a material adverse effect on the Group's financial performance, which has led to a reduction in the carrying value of assets and may materially jeopardise the viability of the Salamanca mine and the price of its Ordinary Shares.

Further, the Company's exploration and any future mining activities are dependent upon the maintenance and renewal from time to time of the appropriate title interests, licences, concessions, leases, claims, permits, environmental decisions, planning consents and other regulatory consents which may be withdrawn or made subject to new limitations. The maintaining or obtaining of renewals or attainment and grant of title interests often depends on the Company being successful in obtaining and maintaining required statutory approvals for its proposed activities. The Company closely monitors the status of its mining permits and licences and works closely with the relevant Government departments in Spain to ensure the various licences are maintained and renewed when required.  However, there is no assurance that such title interests, licenses, concessions, leases, claims, permits, decisions or consents will not be revoked, significantly altered or not renewed to the detriment of the Company or that the renewals and new applications will be successful;

The Company's activities are subject to Government regulations and approvals - Any material adverse changes in government policies or legislation of Spain that affect uranium mining, processing, development and mineral exploration activities, income tax laws, royalty regulations, government subsidies and environmental issues may affect the viability and profitability of the Salamanca mine. No assurance can be given that new rules and regulations will not be enacted or that existing rules and regulations will not be applied in a manner which could adversely impact the Group's mineral properties. As discussed above, a meeting of the full Parliament approved an amendment to the draft climate change and energy transition bill during the year relating to the investigation and exploitation of radioactive minerals (e.g. uranium).

During the year, the Parliament reviewed and approved the amendment Article 10, the text of which remained unchanged from the modified amendment proposed by the Ponencia in February 2021 and subsequently approved by the Commission and the Spanish Senate. As previously reported by the Company, under this amendment: (i) New applications for exploration, investigation or direct exploitation concessions for radioactive materials, nor their extensions, would not be accepted as of the entry into force of this law; and (ii) Existing concessions, and open proceedings and applications related to these, would continue as per normal based on the current legislation which came into effect in May 2021.

The Company currently holds legal, valid and consolidated rights for the investigation and exploitation of its mining projects, including a valid 30-year mining licence (renewable for two further periods of 30 years) for the Salamanca mine, however any new proceedings opened by the Company is not allowed under the new laws. This could pose a risk on future applications the Company may have to make in the future which could have a detrimental effect on the viability of the Salamanca project;

Additional requirements for capital - The issue of the US$65 million Convertible Note and OIA Options to OIA has provided the Company the funds to complete the upfront capital items at the Salamanca mine, subject to the OIA Options being exercised early. Due to delays in the receipt of NSC II, the Company has been funding its ongoing working capital requirements which has reduced the amount available to fund full construction. This position will continue for so long as NSC II remains outstanding, unless the OIA Options are exercised early. As a result of the delay, the Company expects that following receipt of NSC II and in order to fully fund the full construction of the Salamanca mine into steady state production, it will be required to raise additional funding in order to meet the capital costs of the mine development and to fund working capital until positive cash flows are achieved;

The Company may be adversely affected by fluctuations in commodity prices - The price of uranium has fluctuated widely since the Fukushima nuclear power plant disaster in March 2011 and is affected by further numerous factors beyond the control of the Company. Future production, if any, from the Salamanca mine 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 Salamanca project advances, this policy will be reviewed periodically;

The Group's projects are not yet in production - As a result of the substantial expenditures involved in mine development projects, mine developments are prone to material cost overruns versus budget. The capital expenditures and time required to develop new mines are considerable and changes in cost or construction schedules can significantly increase both the time and capital required to build the mine; 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:

Directors

Mr Ian Middlemas                  Chairman

Mr Robert Behets                   Non-Executive Director (Acting Managing Director)

Mr Deepankar Panigrahi      Non-Executive Director

Mr Adam Parker                     Non-Executive Director

Mr Nigel Jones                       Non-Executive Director (resigned 25 November 2020)

Unless otherwise disclosed, Directors held their office from 1 July 2020 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 Australian Institute of Company Directors 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 Energia Limited on 27 April 2012. During the three year period to the end of the financial year, Mr Middlemas has held directorships in Peregrine Gold Limited (September 2020 - present), Constellation Resources Limited (November 2017 - present), Apollo Minerals Limited (July 2016 - present), Paringa Resources Limited (October 2013 - present), Prairie Mining Limited (August 2011 - present), Salt Lake Potash Limited (January 2010 - present), Equatorial Resources Limited (November 2009 - present), Sovereign Metals Limited (July 2006 - present), Odyssey Gold Limited (September 2005 - present), Piedmont Lithium Limited (September 2009 - December 2020) and Cradle Resources Limited (May 2016 - July 2019).

Robert Behets 

Acting Managing Director, Non-Executive Director

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

Mr Behets is a geologist with over 30 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 held directorships in Odyssey Gold Limited (August 2020 - present), Constellation Resources Limited (June 2017 - present), Apollo Minerals Limited (October 2016 - present) and Equatorial Resources Limited (February 2016 - present).

Deepankar Panigrahi

Non-Executive Director

Qualifications - MS, MBA

Mr Panigrahi is an Investment Manager in the Private Equity division of OIA and has extensive experience across a variety of sectors and geographies covering all stages of the private equity process, including post investment management. Mr Panigrahi holds an Undergraduate and Master's degree in Economics with Distinction and Honours from the University of Michigan followed by an MBA from Cambridge University.

Mr Panigrahi was appointed a director of the Company on 30 November 2017. Mr Panigrahi has not been a Director of another listed company in the three years prior to the end of the financial year.

Adam Parker

Non-Executive Director

Qualifications - MA.Chem (Hons), ASIP

Mr Parker joined the Company after a long and successful career in institutional fund management in the City of London spanning almost three decades, including being a co-founder of Majedie Asset Management. Mr Parker began his career in 1987 at Mercury Asset Management (subsequently acquired by Merrill Lynch and now part of BlackRock) and left in 2002 when he co-founded Majedie Asset Management.

Mr Parker was instrumental in building Majedie Asset Management into the successful investment boutique that it is today. He managed funds including the Majedie UK Opportunities Fund, the Majedie UK Smaller Companies Fund and a quarter of the Majedie UK Focus Fund.

Mr Parker was appointed a Director of Berkeley Energia Limited on 14 June 2017. Mr Parker has not been a Director of another listed company in the three years prior to the end of the financial year.

Dylan Browne

Company Secretary

Qualifications - B.Com, CA, AGIA ACG

Mr Browne is a Chartered Accountant and Associate Member of the Governance Institute of Australia (Chartered Secretary) who is currently Company Secretary for a number of ASX and European listed companies that operate in the resources sector. He commenced his career at a large international accounting firm and has since been involved with a number of exploration and development companies operating in the resources sector, based in London and Perth, including Sovereign Metals Limited, Apollo Minerals Limited, Prairie Mining Limited and Papillon Resources Limited. Mr Browne successfully listed Prairie on the Main Board of the London Stock Exchange and the Warsaw Stock Exchange in 2015 and oversaw Berkeley's listings on the Main Board LSE and the Madrid, Barcelona, Bilboa and Valencia Stock Exchanges. Mr Browne was appointed Company Secretary of the Company on 29 October 2015.

OTHER KMP

Francisco Bellón del Rosal (Francisco Bellón)

Chief Operations Officer

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$1 billion. Mr Bellón joined Berkeley Energia Limited in May 2011.

PRINCIPAL ACTIVITIES

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

DIVIDENDS

No dividends have been declared, provided for or paid in respect of the financial year ended 30 June 2021 (2020: nil).

EARNINGS PER SHARE

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.

(i)         On 24 July 2020, the Company announced that the Board of the NSC had issued a favourable report for the extension of the validity of the NSC I for the uranium concentrate plant as a radioactive facility at the Salamanca project;

(ii)        On 11 August 2020, the Company announced that the Urbanism Licence ("UL") had been granted by the Municipality of Retortillo under the terms established in the Urbanism Law and Urban Planning Regulations of Castilla y León for the Salamanca project; and

(iii)       On 25 August 2020, pursuant to the terms of the OIA convertible note, the Company elected to extend the mine commissioning date to 30 November 2021. Under the terms of the convertible note, if mine commissioning has not occurred by 30 November 2020, then the convertible note will automatically convert into shares at the lower of £0.50 per share or the last trading price of the Company's shares on LSE at the relevant time, subject the floor price of £0.27 per share. 

SIGNIFICANT EVENTS AFTER THE BALANCE DATE

(i)         On 12 July 2021, the Company announced that the NSC had issued an unfavourable report for the grant of NSC II. The Company however has taken the steps to overturn the NSC II decision following the submission of an 'Improvement Report' to supplement the Company's initial NSC II Application, along with the corresponding arguments that address all of the issues raised by the NSC, and has requested its reassessment by the NSC. The Improvement Report includes technical arguments that, in the Company's view, will clearly demonstrate that the project is compliant with all requirements for NSC II. Berkeley also submitted further documentation to the MITECO in which the Company, with strongly supported arguments, dismantles all of the technical issues used by the NSC as justification to issue the unfavourable report.

Other than as outlined above, as at the date of this report there are no matters or circumstances, which have arisen since 30 June 2021 that have significantly affected or may significantly affect:

·      the operations, in financial years subsequent to 30 June 2021, of the Consolidated Entity;

·      the results of those operations, in financial years subsequent to 30 June 2021, of the Consolidated Entity; or

·      the state of affairs, in financial years subsequent to 30 June 2021, 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 completion of audits established by the regulations, with the most recent renewal audit successfully completed in July 2021. In addition, the Company obtained the certification on the OHSAS 18001 in September 2018, which set up the criteria for the health and safety management system at the Salamanca project site. The migration from OHSAS 18001 to ISO 45001 is underway and will be completed prior to the end of 2021.

INFORMATION ON DIRECTORS' INTERESTS IN SECURITIES OF BERKELEY

Notes

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

(ii)        'Incentive Options' means an unlisted option to subscribe for one Ordinary Share in the capital of the Company

SHARE OPTIONS AND PERFORMANCE RIGHTS

At the date of this report the following unlisted securities have been issued over unissued Ordinary Shares of the Company:

•     200,000 Performance Rights expiring on 31 December 2021;

•     2,900,000 Incentive Options exercisable at $0.35 each on or before 31 December 2022;

•     3,700,000 Incentive Options exercisable at $0.40 each on or before 31 December 2023;

•     A convertible note with a principal amount US$65 million convertible into 186,815,000 shares at a price of £0.27 per share expiring on 30 November 2021 ("Convertible Note"); and

•     OIA Options as follows:

•     10,089,000 unlisted options exercisable at £0.60 each, vesting on conversion of the Convertible Note and expiring the earlier of 12 months after vesting or on 30 November 2022;

•     15,133,000 unlisted options exercisable at £0.75 each, vesting on conversion of the Convertible Note and expiring the earlier of 18 months after vesting or on 30 May 2023; and

•     25,222,000 unlisted options exercisable at £1.00 each, vesting on conversion of the Convertible Loan Note and expiring the earlier of 24 months after vesting or on 30 November 2023.

These securities do not entitle the holders to participate in any share issue of the Company or any other body corporate. During the year ended 30 June 2021, 376,000 Ordinary Shares were issued as a result of the exercise of Incentive Options. No Ordinary Shares were issued as a result of the exercise or conversion of Performance Rights, the Convertible Note or OIA Options. Subsequent to the end of the financial year and up and until the date of this report, no Ordinary shares have been issued as a result of the exercise or conversion of Incentive Options, Performance Rights, OIA Options or Convertible Note.

MEETINGS OF DIRECTORS

The following table sets out the number of meetings of the Company's Directors and the board committees held during the year ended 30 June 2021, and the number of meetings attended by each director.

The Board as a whole currently performs the functions of an Audit Committee and Risk Committee, however this will be reviewed should the size and nature of the Company's activities change.

Notes

(i)         Remuneration and Nomination Committee meetings are generally considered and approved by means of written resolutions of committee members.

(ii)        Resigned 25 November 2020.

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 Robert Behets                                Non-Executive Director (Acting Managing Director)

Mr Deepankar Panigrahi                   Non-Executive Director

Mr Adam Parker                                  Non-Executive Director

Mr Nigel Jones                                    Non-Executive Director (resigned 25 November 2020)

Other KMP

Mr Francisco Bellón                           Chief Operations Officer

Mr Dylan Browne                                Company Secretary

There were no other KMP of the Company or the Group. Unless otherwise disclosed, the KMP held their position from 1 July 2020 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 KMP:

•     the Group is currently focused on undertaking development and construction activities;

•     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 and Nomination Committee

The Board has established an independent Remuneration and Nomination Committee ("Remcom") to oversee the Group's remuneration and nomination responsibilities and governance. The remuneration committee members currently consist of two directors being Mr Parker (as Chair) and Mr Behets.

The Remcom's role is to determine the remuneration of the Company's executives, oversee the remuneration of KMP, and approve awards under the Company's new long-term incentive plan ("Plan").

The Remcom reviews the performance of executives and KMP and sets the scale and structure of their remuneration and the basis of their service/consulting agreements. In doing so, the Remcom will have due regard to the interests of shareholders.

In determining the remuneration of executives and KMP, the Remcom seeks to enable the Company to attract and retain executives of the highest calibre. In addition, the Remcom decides whether to grant incentives securities in the Company and, if these are to be granted, who the recipients should be.

Remuneration Policy for Executives

The Group's remuneration policy is to provide a fixed remuneration component and a performance based component (Incentive Options, Performance Rights and cash bonuses, 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 will be reviewed annually by the Remcom. 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 and initial infrastructure), corporate activities (e.g. recruitment of key personnel and project financing) and business development activities (e.g. project acquisitions and capital raisings). On an annual basis, after consideration of performance against KPI's, the Board determines the amount, if any, of the annual cash bonus to be paid to each KMP. During the financial year no bonus (2020: nil) was paid, or is payable to KMP.

Performance Based Remuneration - Long Term Incentive

The Group has adopted a Plan comprising the grant of Performance Rights and/or Incentive Options to reward KMP and key employees and contractors for long-term performance of the Company. Shareholders approved the new Plan in November 2019.

To achieve its corporate objectives, the Group needs to attract, incentivise, and retain its key employees and contractors. The Board believes that grants of Performance Rights and/or Incentive Options to KMP will provide a useful tool to underpin the Group's employment and engagement strategy.

(i)         Incentive Options

The Group has a Plan that provides for the issuance of Incentive Options as part of KMP and key employees and contractors remuneration and incentive arrangements in order to attract, retain and to provide an incentive linked to the performance of the Company. 

The Board's policy is to grant Incentive Options to KMP with exercise prices at or above market share price (at the time of agreement). As such, Incentive Options granted to KMP are generally only of benefit if the KMP perform to the level whereby the value of the Group increases sufficiently to warrant exercising the Unlisted Options granted.

Other than service-based vesting conditions (if any) and the exercise price required to exercise the Incentive Options, there are no additional performance criteria on the Unlisted Options granted to executives, as given the speculative nature of the Company'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 Group are closely related.

The Company prohibits executives entering into arrangements to limit their exposure to Incentive Options granted as part of their remuneration package.

During the financial year, no Incentive Options were granted to KMP and key employees under the Plan. 800,000 Incentive Options were exercised by key employees during the financial year.

(ii)        Performance Rights

The Plan also enables the Group to issue unlisted 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.

The Plan enables the Group to: (a) recruit, incentivise and retain KMP and other key employees and contractors needed to achieve the Group's business objectives; (b) link the reward of key staff with the achievement of strategic goals and the long-term performance of the Group; (c) align the financial interest of participants of the Plan with those of Shareholders; and (d) 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 Group 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.

During the financial year, no Performance Rights were granted, converted or lapsed.

Performance Based Remuneration - Long Term Incentive

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. The maximum aggregate amount that may be paid to Non-Executive Directors in a financial year is $350,000, as approved by shareholders at a Meeting of Shareholders held on 6 May 2009. Director's fees paid to Non-Executive Directors accrue on a daily basis. Fees for Non-Executive Directors are not directly 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. Given the size, nature and opportunities of the Company, Non-Executive Directors may receive Incentive Options or Performance Rights in order to secure and retain their services.

Fees for the Chairman were set at $50,000 per annum (2020: $50,000) (including post-employment benefits).

Fees for Non-Executive Directors' were set at $45,000 per annum (2020: $45,000) (including post-employment benefits). These fees cover main board activities only. Non-Executive Directors may receive additional remuneration for other services provided to the Company, including but not limited to, membership of committees.

During the 2021 financial year, no Incentive Options or Performance Rights were granted to Non-Executive Directors.

The Company prohibits Non-Executive Directors entering into arrangements to limit their exposure to Incentive Options granted as part of their remuneration package.

Relationship between Remuneration and Shareholder Wealth

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 KPIs as detailed under 'Performance Based Remuneration - Short Term Incentive' and are not based on share price or earnings. As noted above, a number of KMP have also been granted Performance Rights and Incentive 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.

Relationship between Remuneration of KMP and Earnings

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.

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 and Performance Rights are valued using an appropriate valuation methodology. The value of these Incentive Options and Performance Rights is expensed over the vesting period.

KMP 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:

Notes

⁽¹⁾           Mr Jones resigned effective 25 November 2020.

⁽²⁾           Mr Browne provided services as the Company Secretary through a services agreement with Apollo Group Pty Ltd ("Apollo Group"). During the year, Apollo Group was paid or is payable A$240,000 for the provision of serviced office facilities and administrative, accounting, company secretarial and transaction services to the Group

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

⁽⁴⁾           Contains statutory superannuation and social security.

⁽⁵⁾           Share-based payments are measured for by using a Black-Scholes option pricing valuation method and are expensed over the vesting period of the Incentive Options on issue.

Notes

⁽¹⁾           Mr Browne provided services as the Company Secretary through a services agreement with Apollo Group. During the 2020 year, Apollo Group was paid or is payable A$258,000 for the provision of serviced office facilities and administrative, accounting, company secretarial and transaction services to the Group

⁽²⁾           Other Non-Cash Benefits includes payments made for housing and car benefits.

⁽³⁾           Contains statutory superannuation and social security.

⁽⁴⁾           Share-based payments are measured for by using a Black-Scholes option pricing valuation method and are expensed over the vesting period of the Performance Rights or Incentive Options on issue.

Incentive Options and Performance Rights Granted to KMP

No Incentive Options and Performance Rights were granted, exercised or lapsed for KMP of the Group during the year ended 30 June 2021.

Employment Contracts with Directors and KMP

Current Directors

Mr Ian Middlemas, 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 Robert Behets, Non-Executive Director (Acting Managing Director), has a letter of appointment dated 29 June 2015 confirming the terms and conditions of his appointment. Effective 1 July 2017, Mr Behets has received a fee of $45,000 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 two months' notice.

Mr Panigrahi, Non-Executive Director, has a letter of appointment with Berkeley dated 30 September 2017 confirming the terms and conditions of his appointment. Mr Panigrahi receives a fee of $45,000 per annum.

Mr Adam Parker, Non-Executive Director, has a letter of appointment with Berkeley dated 5 June 2017 confirming the terms and conditions of his appointment. Effective from 28 August 2017, Mr Parker receives a fee of $45,000 per annum for his Board duties and $15,000 for chairing the Remcom.

Current other KMP

Mr Francisco Bellón, has a contract of employment dated 14 April 2011 and amended on 1 July 2011, 13 January 2015 and 16 March 2017. The contract specifies the duties and obligations to be fulfilled by the Chief Operations Officer. The contract has a rolling term and may be terminated by the Company giving six 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.

Equity instruments held by Key Management Personnel

Incentive Options and Performance Rights holdings of KMP

Note

⁽¹⁾           As at resignation date being 25 November 2020.

Shareholdings of KMP

Note

⁽¹⁾           As at resignation date being 25 November 2020.

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. Under the terms and conditions of the insurance contract, the nature of liabilities insured against cannot be disclosed.

To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to indemnify Ernst & Young during or since the financial year.

NON-AUDIT SERVICES

During the year, the Company's auditor, Ernst & Young, received, or is due to receive, $55,038 (2020: $87,751) for the provision of non-audit services. The Directors are satisfied that the provision of non-audit services is compatible with the general standard and independence for auditors imposed by the Corporations Act 2001 ("Corporations Act").

ROUNDING

The amounts contained in the financial report have been rounded to the nearest $1,000 (where rounding is applicable) where noted ($000) under the option available to the Company under ASIC Corporations (Rounding in Financial/Directors' Reports) Instrument 2016/191. The Company is an entity to which this legislative instrument applies.

AUDITOR'S INDEPENDENCE DECLARATION

The auditor's independence declaration is included in the Annual Financial Report published on the Company's website.

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

For and on behalf of the Directors

ROBERT BEHETS

Director

30 August 2021

Forward Looking Statement

Statements regarding plans with respect to Berkeley's mineral properties are forward-looking statements. There can be no assurance that Berkeley's plans for development of its mineral properties will proceed as currently expected. There can also be no assurance that Berkeley 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 Berkeley's mineral properties.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2021

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2021

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2021

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2021