Uranium explorer Berkeley Energia Ltd (LON:BKG) received the backing of the brokers today, with both Liberum and finnCap opening their coverage of the stock with ‘buy’ ratings.
The positive backing from the brokers sent shares soaring more than 10%.
FinnCap has set a target price of 113p for the AIM-listed miner, nearly three times its current value, as Berkeley offers exposure “to the exceptionally high quality Salamanca uranium project” in Spain.
Given the weak uranium market currently, finncap expects this to be the only “major new project to start construction”, something which Berkeley could use to its advantage.
The broker also praised the “expected low operating costs and low upfront capital requirements” at the project.
Liberum was a little more modest in its valuation, setting a target of 60p, noting that near-term catalysts make for “a compelling investment case”.
Like finnCap, the broker was optimistic about the projected low opex and capex costs, explaining that Salamanca is still “economic” despite the weak uranium market.
Liberum added that it sees little downside to Berkeley, as further exploration success and higher uranium prices in the future will only serve to drive the share price higher.
Shares were up 5.2p, or 11%, to 51.5p.