TIDMBKY
RNS Number : 1908K
Berkeley Energia Limited
31 August 2021
BERKELEY ENERGIA LIMITED
2021
ANNUAL REPORT | INFORME ANUAL
ABN 40 052 468 569
CORPORATE DIRECTORY | DIRECTORIO CORPORATIVO
Directors Solicitors
Mr Ian Middlemas Chairman Spain
Mr Robert Behets Acting Managing Herbert Smith Freehills, S.L.P
Director
Mr Deepankar Panigrahi Non-Executive United Kingdom
Director Bryan Cave Leighton Paisner LLP
Mr Adam Parker Non-Executive Director
Australia
Company Secretary Thomson Geer
Mr Dylan Browne
Share Registry
Madrid Head Office Spain
Calle Capitán Haya 1 IBERCLEAR
Planta 15. Edificio Eurocentro. Plaza de la Lealtad, 1,
28020 Madrid España 28014 Madrid España
Project Office United Kingdom
Berkeley Minera España, S.A. Computershare Investor Services
Carretera SA-322, Km 30 PLC
37495 Retortillo The Pavilions, Bridgewater Road
Salamanca, España Bristol BS99 6ZZ
Telephone: +34 923 193 903 Telephone: +44 370 702 0000
Registered Office Australia
Level 9, 28 The Esplanade, Computershare Investor Services
Perth WA 6000 Australia Pty Ltd
Telephone: +61 8 9322 6322 Level 11, 172 St Georges Terrace
Facsimile: +61 8 9322 6558 Perth WA 6000
Telephone: +61 8 9323 2000
Website and Email
www.berkeleyenergia.com Stock Exchange Listings
info@berkeleyenergia.com Spain
Madrid, Barcelona, Bilboa and Valencia
Auditor Stock Exchanges (Code: BKY)
Spain
Ernst & Young España United Kingdom
London Stock Exchange - Main Board
Australia (LSE Code: BKY)
Ernst and Young Australia - Perth
Australia
Bankers Australian Securities Exchange
Spain (ASX Code: BKY)
Santander Bank
Australia
National Australia Bank Ltd
Australia and New Zealand Banking
Group Ltd
CONTENTS | CONTENIDO
Directors' Report
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
The following sections are available in the full version of the
2021 Annual Report (including all figures and diagrams) on the
Company's website at www.berkeleyenergia.com :
Notes to and forming part of the Financial Statements
Directors' Declaration
Auditor's Independence Declaration
Independent Auditor's Report
Corporate Governance
Mineral Resources and Ore Reserves Statement
ASX Additional Information
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
info@berkeleyenergia.com
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 CO(2) 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
GBP0.27. 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. T he
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.
DIVIDS
No dividends have been declared, provided for or paid in respect
of the financial year ended 30 June 2021 (2020: nil).
EARNINGS PER SHARE
2021 2020
Cents Cents
---------------------------------- -------- -------
Basic and diluted loss per share (12.36) (9.63)
---------------------------------- -------- -------
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 GBP0.50 per share or the last trading
price of the Company's shares on LSE at the relevant time, subject
the floor price of GBP0.27 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
Interest in Securities at the Date of this Report
Current Directors Ordinary Shares(i) Incentive Options(ii)
--------------------- ------------------------ --------------------------
Ian Middlemas 9,300,000 -
Robert Behets 2,490,000 2,000,000
Deepankar Panigrahi - -
Adam Parker 200,000 -
--------------------- ------------------------ --------------------------
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 GBP0.27 per share
expiring on 30 November 2021 ("Convertible Note"); and
-- OIA Options as follows:
-- 10,089,000 unlisted options exercisable at GBP0.60 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 GBP0.75 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 GBP1.00 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.
Board Meetings Remuneration and Nomination Committee(i)
-------------------------------------------- --------------------------------------------
Current Directors Number Eligible to Attend Number Attended Number Eligible to Attend Number Attended
--------------------- -------------------------- ---------------- -------------------------- ----------------
Ian Middlemas 2 2 - -
Robert Behets 2 2 - -
Deepankar Panigrahi 2 2 - -
Adam Parker 2 2 - -
Nigel Jones(ii) 1 1 - -
--------------------- -------------------------- ---------------- -------------------------- ----------------
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 f ina n c i al y ear, no Incentive Options were gran
t ed to KM P and key employees under the Plan. 800,000 Incentive
Options w ere exercised by key employees during the fi n an c ial y
ear.
(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.
T h e Plan e n ab l es t he Group t o: (a) re cru it, i n ce nti
v i se and r etain KMP and o t her k ey em p lo y ees and contr ac
t ors need ed to ac h ie ve the Gro u p 's b u si n e ss o b je cti
v es; ( b) li nk the re w ard of key s t aff w ith the a c hie v e
m ent of strate g ic g o a ls a nd t he long-t erm p erfo r ma n ce
of t he Grou p; (c) a l ign the fi n a n ci al i ntere st of pa rti
c ip a nts of the Plan w ith th o se of Sha r eho ld ers; a nd (d)
pro v ide in c en t i v es to parti c i pan ts of t he Plan to fo c
us on su p erior perfo r ma n ce t hat crea t es S ha r ehol d er v
al u e.
Perform an ce Rig hts g r anted u nder the Pl an to e li g ib le
part i c i pan ts w ill be l in k ed to the ac hi e v ement by the
Group of c erta in perfo r m a nce c on d iti ons as d ete r min ed
by t he Bo ard fr om ti me to ti me. T hese perfo r ma n ce c o ndi
t io ns must be s ati sfi ed in order for t he Perf orm an ce Ri gh
ts to v es t. Up on P erfo r ma n ce R igh ts v esti ng, Ord inary
S hares are a uto mati c a lly i s s ued for no c on s ide r ati o
n. If a p erfo r m a nce c o ndi t ion of a Perfo r m a n ce Rig ht
is not a ch i e v ed by the e x piry date t hen t he Pe rform a nce
Right w ill la p se.
During the f ina n c i al y ear, no Perf orm an ce Righ ts were
gran t ed, 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:
Short-term Benefits Non-Cash Percentage
--------------------------------- -------------
Post
Employ-ment Share-Based
Benefits Payments
of Total
Other Remunerat-ion
Non-Cash that Consists Percent-age
Salary Cash Benefits of Options/ Perform-ance
& Fees Incentive (3) (4) (5) Total Rights Related
2021 $ $ $ $ $ $ % %
------------- -------- ----------- ---------- ------------ ------------- -------- -------------- -------------
Directors
Ian Middlemas 45,600 - - 4,332 - 49,932 - -
Robert Behets 206,696 - - 3,904 23,682 234,282 10.1 -
Deepankar
Panigrahi 45,000 - - - - 45,000 - -
Adam Parker 60,000 - - 1,666 - 61,666 - -
Nigel
Jones(1) 18,173 - - - - 18,173 - -
Other KMP
Francisco
Bellón 309,886 - 54,614 24,491 50,743 439,734 11.5 -
Dylan
Browne(2) - - - - 21,499 21,499 100.0 -
Total 685,355 - 54,614 34,393 95,924 870,286
============= ======== =========== ========== ============ ============= ======== ============== =============
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.
Short-term Benefits Non-Cash Percentage
--------------------------------- -------------
Share-Based
Payments
of Total
Other Post Remunerat-ion
Non-Cash Employ-ment that Consists Percent-age
Salary Cash Benefits Benefits of Options/ Perform-ance
& Fees Incentive (2) (3) (4) Total Rights Related
2020 $ $ $ $ $ $ % %
------------- -------- ----------- ---------- ------------ ------------- -------- -------------- -------------
Directors
Ian Middlemas 45,600 - - 4,332 - 49,932 - -
Robert Behets 251,685 - - 3,903 102,352 357,940 28.6 -
Deepankar
Panigrahi 45,000 - - - - 45,000 - -
Adam Parker 60,000 - - - - 60,000 - -
Nigel Jones 45,000 - - - - 45,000 - -
Other KMP -
Francisco
Bellón 319,659 - 52,780 25,263 27,374 425,076 6.4 -
Dylan
Browne(1) - - - - 9,581 9,581 100.0 -
Total 766,944 - 52,780 33,498 139,307 992,529
============= ======== =========== ========== ============ ============= ======== ============== =============
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 EUR 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 EUR190,000 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
Vested Vested and
Held at Granted as securities Held at exerciseable at
2021 1 July 2020 Compen-sation exercised Expired 30 June 2021 30 June 2021
------------------- ------------- ------------------ ----------------- -------- -------------- -----------------
Directors
Ian Middlemas - - - - - -
Robert Behets 2,000,000 - - - 2,000,000 2,000,000
Deepankar -
Panigrahi - - - - -
Adam Parker - - - - - -
Nigel Jones - - - - -(1) -
Other KMP
Francisco
Bellón 2,000,000 - - - 2,000,000 1,000,000
Dylan Browne 700,000 - - - 700,000 350,000
------------------- ------------- ------------------ ----------------- -------- -------------- -----------------
Note
(1) As at resignation date being 25 November 2020.
Shareholdings of KMP
Held at Options Held at
1 July Granted exercised/Rights On market 30 June
2021 2020 as Compensation converted purchase/(sale) 2021
--------------- ---------- ----------------- ------------------ ----------------- ----------
Directors
Ian Middlemas 9,300,000 - - - 9,300,000
Robert Behets 2,490,000 - - - 2,490,000
Deepankar
Panigrahi - - - - -
Adam Parker 200,000 - - - 200,000
Nigel Jones 35,000 - - - 35,000(1)
Other KMP
Francisco
Bellón 1,150,000 - - - 1,150,000
Dylan Browne - - - - -
--------------- ---------- ----------------- ------------------ ----------------- ----------
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 INDEPENCE 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 YEARED 30 JUNE 2021
Note 2021 2020
$000 $000
------------------------------------------------------------------------------------------ ----- -------- --------
Interest income 2 23 1,480
Exploration and evaluation expenses (5,328) (5,779)
Business development expenses (160) (983)
Corporate and administration expenses (1,146) (1,155)
Share-based payment expenses 18 (186) (62)
Fair value movement on financial liabilities 3 (18,253) (41,116)
Impairment expenses 4 (c) (20,358) -
Foreign exchange movements (9,545) 4,726
Loss before income tax (54,953) (42,889)
Income tax benefit/(expense) 5 - -
------------------------------------------------------------------------------------------ ----- -------- --------
Loss after income tax (54,953) (42,889)
------------------------------------------------------------------------------------------ ----- -------- --------
Other comprehensive income, net of income tax:
Items that may be classified subsequently to profit or loss:
Exchange differences arising on translation of foreign operations (604) (538)
------------------------------------------------------------------------------------------ ----- -------- --------
Other comprehensive income, net of income tax (604) (538)
------------------------------------------------------------------------------------------ ----- -------- --------
Total comprehensive loss for the year attributable to Members of Berkeley Energia Limited (55,557) (43,427)
========================================================================================== ===== ======== ========
Basic and diluted loss per share (cents per share) 21 (12.36) (9.63)
------------------------------------------------------------------------------------------ ----- -------- --------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2021
Note 2021 2020
$000 $000
--------------------------------- ---- --------- ---------
ASSETS
Current Assets
Cash and cash equivalents 22 79,066 91,767
Other receivables 6 1,506 1,436
Total Current Assets 80,572 93,203
--------------------------------- ---- --------- ---------
Non-current Assets
Exploration expenditure 7 - 8,293
Property, plant and equipment 8 94 12,855
Other financial assets 9 123 617
--------------------------------- ---- --------- ---------
Total Non-current Assets 217 21,765
--------------------------------- ---- --------- ---------
TOTAL ASSETS 80,789 114,968
--------------------------------- ---- --------- ---------
LIABILITIES
Current Liabilities
Trade and other payables 10 1,767 1,158
Derivative financial liabilities 11 97,535 76,747
Other financial liabilities 12 652 852
Total Current Liabilities 99,954 78,757
--------------------------------- ---- --------- ---------
TOTAL LIABILITIES 99,954 78,757
--------------------------------- ---- --------- ---------
NET ASSETS/(LIABILITIES) (19,165) 36,211
================================= ==== ========= =========
EQUITY
Equity attributable to equity
holders of the Company
Issued capital 13 169,862 169,829
Reserves 14 (1,572) (1,116)
Accumulated losses (187,455) (132,502)
--------------------------------- ---- --------- ---------
TOTAL EQUITY/(DEFICIENCY) (19,165) 36,211
================================= ==== ========= =========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2021
Issued Share- Foreign Accumulated Total
Capital Based Currency Losses Equity
Payments Translation
Reserve Reserve
$000 $000 $000 $000 $000
As at 1 July 2020 169,829 294 (1,410) (132,502) 36,211
Total comprehensive
loss for the period:
Net loss for the year - - - (54,953) (54,953)
Other Comprehensive
Income:
Exchange differences
arising on translation
of foreign operations - - (604) - (604)
-------------------------- -------- ---------- ------------- ------------ ---------
Total comprehensive
loss - - (604) (54,953) (55,557)
-------------------------- -------- ---------- ------------- ------------ ---------
Issue of ordinary shares 38 (38) - - -
Share issue costs (5) - - - (5)
Share-based payments
expense - 186 - - 186
As at 30 June 2021 169,862 442 (2,014) (187,455) (19,165)
========================== ======== ========== ============= ============ =========
As at 1 July 2019 169,736 341 (872) (89,557) 79,648
Effect of adoption of
AASB 16 - - - (56) (56)
-------------------------- -------- ---------- ------------- ------------ ---------
Balance at 1 July 2019
- restated 169,736 341 (872) (89,613) 79,592
Total comprehensive
loss for the period:
Net loss for the year - - - (42,889) (42,889)
Other Comprehensive
Income:
Exchange differences
arising on translation
of foreign operations - - (538) - (538)
-------------------------- -------- ---------- ------------- ------------ ---------
Total comprehensive
loss - - (538) (42,889) (43,427)
-------------------------- -------- ---------- ------------- ------------ ---------
Issue of ordinary shares 110 - - - 110
Share issue costs (17) - - - (17)
Lapse of Performance
Rights - (109) - - (109)
Share-based payments
expense - 62 - - 62
-------------------------- -------- ---------- ------------- ------------ ---------
As at 30 June 2020 169,829 294 (1,410) (132,502) 36,211
========================== ======== ========== ============= ============ =========
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2021
Note 2021 2020
$000 $000
------------------------------------------- ------ ------- -------
Cash flows from operating activities
Payments to suppliers and employees (5,614) (8,700)
Interest received 23 1,499
Net cash outflow from operating activities 22 (a) (5,591) (7,201)
------------------------------------------- ------ ------- -------
Cash flows from investing activities
Payments for property, plant and equipment (95) (215)
------------------------------------------- ------ ------- -------
Net cash outflow from investing activities (95) (215)
------------------------------------------- ------ ------- -------
Cash flows from financing activities
Transaction costs from issue of securities (5) (2)
Net cash outflow from financing activities (5) (2)
------------------------------------------- ------ ------- -------
Net decrease in cash and cash equivalents
held (5,691) (7,418)
Cash and cash equivalents at the beginning
of the financial year 91,767 96,587
Effects of exchange rate changes on
cash and cash equivalents (7,010) 2,598
------------------------------------------- ------ ------- -------
Cash and cash equivalents at the end
of the financial year 22 (b) 79,066 91,767
=========================================== ====== ======= =======
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August 31, 2021 02:00 ET (06:00 GMT)
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