Quarterly Report June 2024

Quarterly Report June 2024

Summary:

Commencement of International Arbitration against Spain

During the quarter, Berkeley Energia Limited (Berkeley or Company) advised that its wholly owned subsidiary, Berkeley Exploration Limited (BEL), had filed a Request for Arbitration (Request) for its investments in Spain through its Spanish subsidiary, Berkeley Minera España SA (BME), initiating arbitration proceedings against the Kingdom of Spain (Spain) before the International Centre for Settlement of Investment Disputes (ICSID).

As part of its Request, BEL alleges that Spain's actions against BME and the Salamanca project have violated multiple provisions of the Energy Charter Treaty (ECT), and that BEL is seeking preliminary compensation in the order of US$1 billion (US$1,000,000,000) for these violations.

In November 2022, BEL submitted a written notification of an investment dispute to the Prime Minister of Spain and the Ministry for the Ecological Transition and the Demographic Challenge (MITECO) informing them of the nature of the dispute and the ECT breaches, and that it proposed to seek prompt negotiations for an amicable solution pursuant to article 26.1 of the ECT. The Spanish government has not engaged in any discussions related to the dispute to date, and BEL filed its Request in order to enforce its rights at the Salamanca project through international arbitration. The Request was jointly submitted by specialist teams at Herbert Smith Freehills Spain LLP and LCS Abogados who will represent BEL in the arbitration proceedings.

BEL has now received the Notice of Registration from ICSID, and in the next phase of proceedings tribunal members will be selected and appointed, thereby formally establishing the tribunal.

Global Nuclear Power and Uranium Market:

Global spot market activity declined in the quarter, resulting in the uranium spot price closing down for the quarter at US$84 per pound.

During June, the 3-yr Forward Price weakened to US$94 per pound while the 5-yr Forward Price reported at US$101 per pound. The Long-Term Price firmed slightly reaching US$79 per pound.

United States

o President Biden signing into law the "Prohibiting Russian Uranium Imports Act" which becomes effective on 11 August 2024, when imports of Russian uranium into the United States are no longer allowed, subject to a waiver procedure.

The prohibition allows the Secretary of Energy (in consultation with the Secretary of State and the Secretary of Commerce) to waive temporarily the prohibition, and permits importation of Russian low-enriched uranium (LEU) if the Secretary of Energy determines that there is no alternative viable source of LEU available to sustain the continuing operation of a nuclear reactor or a US nuclear energy company, or importation of LEU is in the national interest. However, any waiver by the Secretary of Energy will terminate no later than 1 January 2028 when all Russian uranium importation will be banned through 2040.

o Public support in the USA for nuclear energy is at a record high level, according to the latest survey by Bisconti Research Inc. The results show that for four years in a row, more than three-quarters of the US public said that they favoured the use of nuclear energy.

Canada

o The Canadian government has announced the release of Building Canada's Clean Future, an action plan to modernise federal assessment and permitting processes to help speed up projects to help fight climate change, create and support jobs, and grow the Canadian economy. The plan includes, amongst other things, setting an assessment and permitting target of three years for nuclear projects.

European Union

o Leaders from across the European nuclear industry published a manifesto outlining their priorities for the new European Commission. Nuclear energy, they note, plays a crucial role in providing the EU with secure and affordable energy.

Sweden

o Swedish utility, Vattenfall, announced that the company has decided to pursue operating lifetime extensions for the Forsmark and Ringhals reactors, which would allow the units to operate for 80 years as compared to the current 60 years. Vattenfall intends to invest an estimated US$4-5 billion to replace or renovate systems and components.

Italy

o The Italian Energy Minister voiced the government's support to investigate the reintroduction of nuclear power, especially small modular reactors (SMRs), in the country. He cited the need to meet net zero targets by 2050, as well as energy independence. Previously, Italy operated four reactors but the program was shut down following the Chernobyl accident in 1986.

o Under Italy's new energy and climate plan, nuclear power will account for 10-11% of the electricity mix, the Environment and Energy Security Minister told the ANSA news agency. He said the government was finalising the plan and would submit it to the EU by the end of the month. The plan covers the period up to 2030.

Estonia

o Estonian parliament passed a resolution supporting the adoption of nuclear energy in the country, paving the way for the creation of the necessary legal and regulatory framework.

Norway

o The Norwegian government appointed a committee to conduct a broad review and assessment of various aspects of a possible future establishment of nuclear power in the country. It must deliver its report by 1 April 2026.

Georgia

o Georgia Power announced the commercial operation of the Vogtle-4 reactor, following the completion of the Vogtle-3 reactor in July 2023. Vogtle Units 1 & 2 have been in operation since 1987 and 1989 respectively and are currently licensed to operate for 60 years.

Balance Sheet

The Company is in a strong financial position with A$77 million in cash reserves and no debt.

BEL's wholly owned subsidiary, BME currently holds legal, valid and consolidated rights for the investigation and exploitation of its mining projects, including the 30-year mining licence (renewable for two further periods of 30 years) for the Salamanca project, however any new proceedings opened by the Company is now not allowed under the aforementioned new law.

In November 2021, BME received formal notification from MITECO that it had rejected the construction of the plant as a radioactive facility (NSC II) at the Company's Salamanca project following an unfavourable report for the grant of NSC II issued by the Board of the Nuclear Safety Council (NSC) in July 2021.

Salamanca Project Update

During the quarter, an audit of the Environmental Management System according to ISO 14001 Standards and Sustainable Mining Management System according to UNE 22470/80 Standards of the Company's activities was carried out. No compliance issues were identified during the audit and the final report noted that BME continues to improve its climate change and sustainability processes.

The Company's 2023 Sustainability Report was published during the quarter and can be viewed at https://wp-berkeleyenergia-2020.s3.eu-west-2.amazonaws.com/media/2024/06/Sustainable-P-Report-v10r.pdf. The Company is now working towards setting its sustainability goals for the upcoming 2024 period.

Solar Power System Study

As previously reported, Berkeley initiated a study evaluating the design, permitting, construction and operation of a solar power system at the Project. This study has been finalised, a formal application submitted to the relevant authorities in Salamanca, and the permitting process continued during the quarter.

Exploration

During the quarter, the Company continued with its initial exploration program focusing on battery and critical metals in Spain. The exploration initiative is targeting lithium, cobalt, tin, tungsten, rare earths, and other battery and critical metals, within the Company's existing tenements in western Spain that do not form part of Berkeley's main undertaking being the development of the Salamanca project. Further analysis of the mineral and metal endowment across the entire mineral rich province and other prospective regions in Spain is also being undertaken, with a view to identifying additional targets and regional consolidation opportunities.

Investigation Permit Conchas

Based on the results of the soil sampling programs and information gleaned from a review of the available historical data, a small initial drilling program was implemented in 2022 to test the tin-lithium anomaly. The drill program comprised five broad spaced reverse circulation (RC) holes for a total of 282m. Anomalous results for lithium (Li), tin (Sn), rubidium (Rb), caesium (Cs), niobium (Nb) and tantalum (Ta) obtained from multi-element analysis of drill samples were reported in the March 2023 quarter, demonstrating IP Conchas' exploration potential for several critical and strategic raw materials included in the European Commission's Critical Raw Materials Act.

A number of mineralogical studies have subsequently been undertaken to determine the mineral species present and understand their characteristics and properties. Results of these studies indicate the mineralised muscovitic leucogranite is composed mainly of plagioclase (average content of 55%) and quartz (average content of 25%), with potassium feldspar, muscovite mica, and Li-mica making up remainder of the rock. The samples have an average Li-mica content of 3%.

The Company has advanced plans for a second drilling campaign at IP Conchas focused on improving confidence in the geology, continuity, and grade distribution of the zone of multi-element mineralisation.

The planned campaign will comprise 32 RC holes for 1,870m drilled on a 100m-by-100m grid, with depths ranging from 30m to a maximum of 130m. In addition, four PQ diamond core holes for 500m will be drilled to collect samples for metallurgical test work purposes.

The drilling campaign is anticipated to commence in early August 2024.

Figure 1: IP Conchas Location Plans and Geology / Drill Hole Location Plan

Figure 2: IP Conchas Cross Section A-A1

Oliva and La Majada Projects

The Company has designed exploration programs for both projects, communicated with the relevant authorities and commenced any required studies e.g. a birdlife study at the La Majada Project, to progress the pending grant of the IPs for two of the tenements.

Additional Information on the Global Nuclear Power and Uranium Market

• Total energy investment worldwide is expected to exceed US$3 trillion in 2024 for the first time, with some US$2 trillion set to go toward clean technologies, the International Energy Agency (IEA) says in its newly released World Energy Investment 2024. Investments in nuclear power, it says, are expected to increase in 2024, with its share (9%) in clean power investments rising after two consecutive years of decline. The IEA expects total investment in nuclear to reach US$80 billion in 2024, nearly double the 2018 level, which was "the lowest point in a decade.
• Unit 1 of the Ascó nuclear power plant in Spain recently reached the figure of 300,000 GWh contributed to the electrical grid, as announced by the operator. It becomes the fourth Spanish electricity production facility to reach this milestone. Ascó I, a 1030 MWe pressurised water reactor, completed 40 years of operation in August last year. The milestone reached by the plant represents the generation of as much electrical energy as the city of Barcelona would consume for 23 years.
• The European Commission has approved, under EU State aid rules, a EUR300 million (US$320 million) French measure to support EDF subsidiary Nuward in researching and developing SMRs. Under the measure, the aid will take the form of a direct grant that will cover the R&D project until early 2027. The measure will support Nuward in sizing the modules and components of the SMRs and validating their integration in the SMRs by means of numerical simulators and laboratory tests. The commission said the measure "will contribute to the achievement of the strategic objectives of the European industrial strategy and the European Green Deal.
• French utility EDF has signed green bank loans for a total amount of about EUR5.8 billion (US$6.3 billion), which will be used to finance the life extension of its existing nuclear power plant fleet in France.
• Speaking at a conference in Athens, Greece's Prime Minister spoke about the possibility of constructing SMRs for electricity generation. "There is no way to achieve carbon neutrality without nuclear energy," he was cited as saying. "So, as Europeans, are we investing in the next generation of small nuclear reactors."
• The European Commission has approved Czechia's proposed public support package for new nuclear - after modifications were made to address their concerns during an inquiry which began in June 2022.
• Norsk Kjernekraft has submitted a proposal to Norway's Ministry of Energy for an assessment into the construction of a power plant based on multiple SMRs in Norway. The company said it marks the first step in the formal process to establish nuclear power plants.
• Polish industrial group Industria's plan to construct a power plant based on Rolls-Royce's SMRs was approved by the Ministry of Climate and Environment.
• The Kyrgyzstan government passed a draft bill which invalidates the 2019 law on prohibition of geological exploration and development of uranium deposits. Adoption of amended law will be accompanied by monitoring of the latest technologies in extraction of uranium, which will aim to minimise negative impact of mining on the environment.
• The Liberal Party of Australia confirmed that a future Australian Federal Coalition Government would introduce nuclear energy in the country, and announced seven locations where plants could be built.
• Australian attitudes towards energy sources have shifted markedly, the 20th edition of the Lowy Institute's annual poll has found, with six in ten now supportive of Australia using nuclear power to generate electricity.
• US utilities purchased 27% more uranium in 2023 than 2022, according to the US Energy Information Administration's latest annual report. Most of this came from foreign suppliers - US-origin material accounted for 5% of total deliveries, the same percentage as 2022.
• Thailand's Prime Minister used his first monthly television address as the country's leader to promote plans for constructing a nuclear power plant to reduce electricity costs. Nuclear power would also help Thailand achieve its net-zero carbon emission pledge, the Prime Minister has said.
• Japan's Nuclear Regulation Authority has approved operating license extension (20 years) for Kansai Electric Power Company's Takahama 3 & 4 reactor (2 x 830 Mwe). Previously, Kansai's Takahama 1 & 2 (2 x 780 Mwe) were the first two reactors in Japan to receive operating license extensions.
• Reuters reported during the quarter that the UAE / Emirates Nuclear Power Corporation is planning to construct a second Nuclear Power Plant following the recent completion of the Barakah reactors, consisting of four Korean-built APR-1400 reactors (Barakah-4 was connected to the grid in March 2024). The associated tender could be distributed sometime this year with the target date for commercial operations being as early as 2033.

Appendix 1: Mineral Resource at Salamanca

Appendix 2: Summary of Mining Tenements

As at 30 June 2024, the Company had an interest in the following tenements:

^The Company has applied for an Exploitation Concession from the existing IP Almendro.

**Exploracion de Recuros Minerales S.L.U (ERM), a wholly owned subsidiary of the Company, has entered into a Tenement Sale and Purchase Agreement and Royalty Deed with COPROMI, to acquire IP Los Bélicos, IPA Ampliación Los Bélicos, and IPA La Majada.

Appendix 3: Related Party Payments

During the quarter ended 30 June 2024, the Company made payments of $171,000 to related parties and their associates. These payments relate to existing remuneration arrangements (director and consulting fees plus statutory superannuation).

Appendix 4: Exploration and Mining Expenditure

During the quarter ended 30 June 2024, the Company made the following payments in relation to exploration and development activities:

Appendix 5B

Mining exploration entity or oil and gas exploration entity

quarterly cash flow report

Name of entity

Berkeley Energia Limited

Answer: Not applicable

Answer: Not applicable

Answer: Not applicable

Compliance statement

2 This statement gives a true and fair view of the matters disclosed.

Date: 31 July 2024

Authorised by: Company Secretary

(Name of body or officer authorising release - see note 4)

Notes