Berkeley Resources (LON:BKY, ASX:BKY) has entered into a non-binding memorandum of understanding (MoU) with Korea Electric Power Corp to finance and develop the Salamanca uranium project in Spain, reaffirming its determination to have the project operational by 2012.
KEPCO is a Korean government invested diversified energy company with assets over US$80 billion and revenues of over US$30 billion. The company is involved in the generation, transmission and distribution of electrical power from nuclear, hydro, coal, oil and LNG sources worldwide.
KEPCO provides electricity to almost all households in Korea and operates twenty nuclear power plants in the country with six more under construction.
KEPCO will invest US$70 million for a 35% interest in the Salamanca project, which comprises the Aguila, Alameda, Retortillo and Villar mining areas. KEPCO will also contribute funding of 35% for the development of the project assets to bring them into production, as long as ongoing operating expenditure.
Under the terms of the agreement, KEPCO will execute a proposed offtake agreement to purchase 35% of the Salamanca Uranium Project's U308 production at industry standard terms, based on a mix of spot and term prices.
Berkeley stated that the deal with the Koreans confirmed its “determination to rapidly develop the Salamanca project” and be operational by 2012, while also giving the company flexibility in both the financing plan and market awareness.
“This marks a significant achievement in the progress of Berkeley's development cycle and goes a long way to achieve the development of this unique and strategic project,” said managing firector of Berkeley Ian Stalker.
Berkeley will retain 100% of the exploration potential in its extensive portfolio as well as the Gambuta project, which has a JORC inferred resource of 9.2 Mlbs (million pounds).
Shares in the company rallied 3.5% on the news in midday London deals.