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Berkeley Energia remains “firmly committed” but need local approvals

“Over the past decade, we have invested over €70mln into the Salamanca mine which is located in a region suffering from some of the highest levels of youth unemployment within the European Union"

Mining truck
The mine developer today issued its latest quarterly report

Berkeley Energia Ltd (LON:BKY) chief executive Paul Atherley has told investors that the company remains “firmly committed” to developing its Spanish uranium mine, though, he said that continuing investment would depend upon the company receiving approvals to start construction.

“We are working closely with the relevant authorities and are confident that with due process these approvals will be forthcoming, however, in the meantime, we are taking the necessary steps to reduce costs,” Atherley said, as the company released its quarterly report.

He added: “Over the past decade we have invested over €70mln into the Salamanca mine which is located in a region suffering from some of the highest levels of youth unemployment within the European Union.

READ: Berkeley Energia welcomes Spanish support for Salamanca project

“Our future €250mln investment requires no government subsidy, will potentially generate over 2,500 direct and indirect jobs, will stimulate the return of services such as schools, petrol stations and transport to the local villages and has the potential to bring back some of the 120,000 mainly young people who have left the area over the last few years to look for employment.”

Berkeley’s quarterly report highlighted strong and growing local support for the Salamanca mine project – with a campaign receiving over 1,600 signatures, and some 22,850 job applications sent to the company.

The company noted that it is working closely with its legal advisors and it continues to seek an express resolution from the local municipality on the award of the Urbanism Licence. There are two outstanding items, which the company said it has now responded to.

It expects to will issue a further update to the market in due course regarding the likely timing of the commencement of construction. It added that, in the absence of certainty over the timing, it is initiating a programme to reduce local and corporate costs.

Looking outward, the company noted continued strength in the uranium price during the quarter, with the price up 21% ending the period at $27.38.

Berkeley noted that it has received a number of enquiries from the US, China and India for substantial term contract offtake commitments.

The company has 2.75mln pounds of U3O8 under contract for the first six years with a further 1.25mln pounds of optional volume, at an average price above US$42.

It said it will continue to progressively build its offtake book and has granted the Oman sovereign wealth fund the right to match any future long-term offtake transactions.

Quick facts: Berkeley Energia Ltd

Price: 11.75 GBX

LSE:BKY
Market: LSE
Market Cap: £30.37 m
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Watch

Caution over Berkeley Energia report casting doubt over Spanish government...

Numis Securities analyst Justin Chan chats to Proactive London's Andrew Scott following a Reuters report suggesting Spain’s government will not issue the required permits for construction of Berkeley Energia Ltd 's (LON:BKY) Salamanca mine to go-ahead, even though the project was granted...

on 17/10/18

3 min read