Berkeley Energia : Quarterly Report June 2022

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NEWS RELEASE | 29 July 2022

Quarterly Report June 2022

Highlights:

• Appointment of Spanish Based Director
  The Company strengthened the Board's technical capacity and Spanish operating experience with the appointment of Mr Francisco Bellón as an Executive Director.
  Mr Bellón is a Mining Engineer with more than 25 years of experience in the resources sector, including specialisation in mineral processing. During his career, Mr Bellón has participated in the construction, commissioning and operation of four mines in Spain, two in South America and two in West Africa, working at an executive level for Toronto, New York or Madrid Stock Exchange listed companies, such as Rio Narcea Gold Mines, Lundin Mining, ENDESA and Duro Felguera.
  Mr Bellón who is based in Salamanca, joined Berkeley in 2011 as General Manager of Operations, and was subsequently promoted to Chief Operating Officer in 2017. During this period, Mr Bellón has been responsible for the Company's day-to-day operations in Spain, and has overseen the development of the Salamanca Project from the Scoping Study stage through to the completion of the Definitive Feasibility Study and Front End Engineering Design.
  Mr Bellón has a Masters Degrees in Mining Engineering and Occupational Health and Safety, Investor Relations Certification from the Madrid Stock Exchange, and is Member of the Australasian Institute of Mining and Metallurgy.
• European Nuclear Power and Global Uranium Market:
  The outlook for nuclear power and the uranium market strengthened further during the quarter, with a number of important recent developments, including:
• • The European Parliament voted to reject objections to the inclusion of natural gas and nuclear power in its taxonomy plan which had been subjected to extensive debate since late 2021. A majority of ministers voted against the effort to block the inclusion of the two fuels/generating technologies. Reportedly, "the result means the European Commission's proposals to include certain nuclear and gas activities within the list of investments that meet the taxonomy requirements, is now due to come into force from the start of 2023, given that the European Council is not expected to object to it".
    Further, the European Commission released its proposed "REPowerEU Plan" in response to the Russian invasion of Ukraine. The Plan looks to reduce/eliminate the European Union's dependency on fossil fuel imports from Russia.
  • At the Group of Seven ("G7") meeting held in Germany, the broad-ranging G7 Leader's Communique specifically addressed the Russian aggression in Ukraine and its effects on global energy. Regarding commercial nuclear power, the world leaders stated; "Those countries that opt to use it reaffirm the role of nuclear energy in their energy mix. Those countries recognise its potential to provide affordable low-carbon energy and contribute to the security of energy supply as a source of baseload energy and grid flexibility."
    Recognising the global role of Russian-sourced nuclear fuel, the communique clearly stated; "We will further reduce reliance on civil nuclear and related goods from Russia, including working to assist countries seeking to diversify their supplies. We task our relevant Ministers to evaluate the feasibility and efficiency of these measures urgently."

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• The International Energy Agency ("IEA") released a new report Nuclear Power and Secure Energy Transitions: From Today's Challenges to Tomorrow's Clean Energy Systems that highlights nuclear has an essential part to play in delivering a clean, affordable and secure energy future. According to the IEA's report, a low-carbon, sustainable, affordable and secure energy future needs nuclear.
• Spain's main opposition party, Partido Popular ("PP"), outlined its economic proposals to deal with the economic and energy crises that the country is currently experiencing. The actions include the resurrection of nuclear power in Spain and "extending the useful life of the reactors" in line with what other European countries are doing. The PP believes that this technology must play a key role in the ecological transition as a support for renewable energies, since the opposite would imply greater gas consumption and therefore greater dependence on countries such as Russia.
  Security of supply concerns continued to be raised in Spain given that the country's existing nuclear power and fuel fabrication facilities import approximately 39% (2020) of their required uranium from Russia.
• President Macron cancelled the plan to close 12 reactors by 2035 and requested the state- owned nuclear operator, EDF, to study the feasibility of prolonging reactor lifespans beyond the statutory 50 years. In addition, his government supports the construction of six European Pressurised Reactors by 2050.
• Belgium's Nuclear Research Centre announced that it will soon begin working with international partners to evaluate the use case for advanced reactors in Belgium. The agency said it is now operating with a Belgian federal government issued €100 million budget, and allocated €25 million per year for four years, to conduct in-depth research into new nuclear units.
• A new survey carried out in Finland showed that support for nuclear power is at record highs across the country. The survey noted that nuclear power favourability has been measured continually since 1983, and the latest results have beat all-time highs, as more than 60% of the survey's respondents have a positive attitude towards nuclear power. 11% of Finns have a negative stance toward nuclear energy, with 62% of respondents noting that nuclear power is an important tool for combating climate change.
  Finland's Green Party, part of the government coalition, also voted to adopt a fully pro-nuclear stance. The party manifesto now states that nuclear is "sustainable energy" and demands the reform of current energy legislation to streamline the approval process for small modular reactors. It also supports licence extensions for existing nuclear reactors. Finland's is the first Green Party to adopt such a position.
• Swedish MP, Mats Nordberg, emphasized that in order to help counter the Russian aggression in Ukraine there is a need for "mutual assistance and unity" and called for the restart of nuclear reactors and planning for new reactors. Nordberg observed that "The existing reactors, where possible, should continue to work. We must also continue to plan the launch of new nuclear reactors to make the European Union more self-sufficient in the field of energy resources."
• Germany disclosed that it is reviewing all options at its disposal to ensure the country's energy supply remains robust amid uncertainty over Russian gas supply. The Economy Ministry stated in July that Germany may extend the life of its three remaining nuclear power plants, as public support increases in the face of growing energy shortages. The three plants - Isar 2, Emsland and Neckarwestheim 2 - which made up 6% of Germany's power production in the first quarter of 2022, are scheduled to close at the end of the year.
• The UK government released its national energy strategy policy paper outlining that nation's plans for enhanced energy security. Under the energy policy, nuclear would provide up to 25% of the country's electricity by 2050 from up to 24 GWe of nuclear generating capacity. In order to support its ambitious commercial nuclear power goals, the UK will establish the Great British Nuclear Vehicle designed to provide support to nuclear projects "through every stage of the development process.

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• China announced plans to construct a further six nuclear reactors as the country pursues its Net Zero goals, with approval given for Sanmen units 3 and 4, Haiyang 3 and 4, and Lufeng 5 and 6.
• Japan will have as many as nine nuclear power reactors in operation this winter, stated Prime Minister Fumio Kishida. With five reactors currently online, the move will boost combined capacity from nuclear to around 10% of the country's electricity needs. "We want to have ample capacity to ensure a stable supply of electricity during peak times," Kishida said. "The national government will take the lead" on restarting these reactors, "making tenacious efforts to secure the understanding and cooperation of local governments and other stakeholders."
• South Korea released its revised energy policy which sets the goal of maintaining nuclear power's share of total electricity generation at a minimum of 30% by 2030.
  Newly-elected President, Yoon Suk-yeol announced the construction of two reactors would resume immediately. The Ministry of Trade, Industry and Energy also commented that in response to the global goals of carbon neutrality and the Russia-Ukraine conflict which threatens global energy security supply chains, "it is imperative that new energy policy goals and directions are set to better accomplish carbon neutral government projects and the expansion of nuclear power." Included in the energy policy are the goals of exporting 10 nuclear power plants by 2030 as well as the development of a Korean small modular reactor design.

The Uranium spot price closed at US$49.00 per pound at the end of June 2022, with the spot market volume increasing to 3.3 million pounds, more than 40% up from the May total volumes.

Longer-term uranium price indicators continued to rise steadily with a 23.5% increased year to date. At the end of June, prices closed at US$50.00 per pound (Long-Term); US$54.50 per pound (3- year forward price); and US$57.25 per pound (5-year forward price).

• Balance Sheet
  The Company is in a strong financial position with A$80 million in cash reserves and no debt.

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Salamanca Project Summary

The Salamanca Project ("Salamanca" or "Project") is being developed in an historic uranium mining area in Western Spain about three hours west of Madrid.

The Project hosts a Mineral Resource of 89.3Mlb uranium, with more than two thirds in the Measured and Indicated category. In 2016, Berkeley published the results of a robust Definitive Feasibility Study ("DFS") for Salamanca confirming that the Project will be one of the world's lowest cost producers, capable of generating strong after-tax cash flows. The DFS was based solely on Measured and Indicated Resources, with the following key study outputs and economics:

• Producing 4.4 million pounds of uranium per annum (steady state operation)
• Initial mine life of 14 years
• Uranium prices based on UxC annual mid-long term base price projection (US$39.06 per pound (2017) - US$67.69 per pound (2030))
• Initial capital cost of US$95.7 million
• Operating costs of US$15.39 per pound
• Post-taxNPV8 of US$531.9 million
• Post-taxIRR of 60%

In 2021, the Company received formal notification from Ministry for Ecological Transition and the Demographic Challenge ("MITECO") that it had rejected the Authorisation for Construction for the uranium plant as a radioactive facility ("NSC II") application at Salamanca. This decision followed the unfavourable NSC II report issued by the Nuclear Safety Council ("NSC") in July 2021.

The Company continues to strongly defend its position in relation to the adverse resolution by MITECO and has submitted an administrative appeal against the decision under Spanish law.

In Berkeley's strong opinion, MITECO has rejected the Company's NSC II application without following a legally established procedure and the Company believes that MITECO has infringed regulations on administrative procedures in Spain, as well as Berkeley's right of defence, which would imply that the decision on the rejection of the Company's NSC II application is not legal.

NSC II is the only key approval required to commence full construction of the Salamanca mine.

The Salamanca mine is being developed to the highest international standards and the Company's commitment to health, safety and the environment is a priority. Berkeley holds certificates in Sustainable Mining (UNE 22470-80) and Environmental Management (ISO 14001) 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.

Berkeley's efforts in the key area of Sustainable Mining have been independently recognised with it being selected as the winner of the Outstanding Contribution to Sustainable Mining - Europe category in the 2020 Capital Finance International Sustainability Awards.

The Company is in a strong financial position with A$80 million in cash reserves and no debt.

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A copy of the Sustainable Performance Report can be found on the Company's website at: www.berkeleyenergia.com/sustainable-mining/.

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