Berkeley Energia Ltd (LON:BKY), the Spain-focused uranium group, said Monday it has commenced discussions with major European, Asian and US utilities interested in acquiring output from its Salamanca operation.
“The project is one of the few large scale and low cost uranium mines in the world commencing development in 2016 and a recent visit to Asia has indicated a high level of interest in the project's offtake arrangements and potential financing amongst the main utilities and trading houses,” the company said.
The update was given alongside its interim results, which charted a period of significant progress.
One of the highlights was the proving up of the resource from the Zona 7 deposit, which lifted the net present value of the project to US$353.5mln.
The inclusion of Zona 7 was transformational as it increased the mine life from eleven to eighteen years and reduced operating costs to US$15.60 per pound from US$24.60.
Total capital costs to develop and commence production for Salamanca’s three deposits are estimated at just over US$200mln.
Berkeley said it continued to receive approaches from “potential financiers and strategic partners” keep to help it develop the project.
“The company is exploring a range of financing options and strategic partnerships with a view to fully funding the project's development whilst minimising shareholder equity dilution,” it added.
“A number of the prospective financiers and strategic partners have commenced detailed due diligence reviews with site visits currently underway.”
As is common with mine developers at this formative stage of their development, Berkeley was loss-making. The deficit for the six months ended December 31 was US$5.8mln. At that date it had cash and cash equivalents of US$8.4mln.