Berkeley Energia Ltd’s (LON:BKY) has highlighted the progress of its flagship Salamanca project, following the completion of a US$120mln deal with the Oman sovereign wealth fund.
“The company is now focused on awarding major contracts, filling key management positions and conducting detailed reviews focused on ensuring that the very best capital and operating costs are achieved,” the company said in a statement.
READ: Berkeley Energia to bring Salamanca on stream just as uranium market tips into deficit
The contracting process has been competitive and as a result it is seeing improved cost for the project. it said.
“The competitive quotes received which have driven capital and operating costs down have in some cases been offset by the appreciation of the euro and higher than expected indirect costs.”
It also highlighted that the management team is also being strengthened, notably with the appointment of Sergio Arenas as plant manager.
Following the Oman project funding, the company is now intends to step up efforts to secure offtake sales once full construction operations start. It expects to benefit from changing dynamics in the uranium market.
“The company's view is that the recent production cuts by Tier 1 producers, Cameco and KazAtomProm, could be a turning point in the uranium market.
“Cameco's suspension of production, the latest in a long line of production cuts, brings the total volume of uranium removed from the market in 2018 to 17 million pounds, about 12% of primary mine supply.”
It added: “The Salamanca mine is scheduled to reach production as the market enters a supply/demand deficit that industry experts have called both fundamental and unavoidable.
“US utilities looking to re-contract will be competing with Chinese and Japanese reactor demand, which may lead to higher spot and term contract prices.”
In terms of financial results, the pre-revenue mine developer reported a US$40.5mln loss for the year and it ended the year with US$107.5mln of cash and equivalents.