Berkeley finds investor to fund Spain uranium mine to production

JOHANNESBURG (miningweekly.com) – Aim- and ASX-listed Berkeley Energia has signed a $120-million investment agreement with the sovereign wealth fund of Oman to fund the Salamanca uranium mine, in Spain, into production.

The investment will position Oman as a long-term strategic investor in the company, as well as a potential offtake partner.

The investment is structured as an interest-free and unsecured convertible loan of $65-million, which can be converted into ordinary shares at 50p a share resulting in the fund owning approximately 28% of the company; and three tranches of options convertible at a weighted average price of 85p a share contributing a further $55-million towards the later phases of the company's development of the Salamanca mine resulting in the fund holding a further 9% of the company.

Berkeley Energia MD Paul Atherley said on Wednesday that Oman’s involvement would assist the company in achieving the full potential of the Salamanca project, which is one of the only major uranium mines in development at the moment.

“The project benefits from a rare combination of low up-front capital cost and very low operating costs and due in part to its location in the heart of the European Union we are able to contract supply at prices well above the current spot price.

“The fund's interest in matching our future offtake contracts will further enhance our revenue stream."

Berkeley is spending €82.3-million on building the Salamanca mine, which will produce 4.4-million pounds a year over ten years – placing the company among the top-ten global uranium producers.

Construction started last month.