Berkeley secures funding to bring Spanish uranium mine into production

JOHANNESBURG (miningweekly.com) – Following shareholder approval announced on Thursday, uranium project developer Berkeley Energia has completed a strategic investment of up to $120-million with the sovereign wealth fund of the Sultanate of Oman, which means that Berkeley can now bring the Spain-based Salamanca uranium mine into production.

The ASX- and Aim-listed miner noted that all precedent conditions had been met and that the company had received the initial $65-million tranche of funding.

“We are delighted to have now closed the Oman financing transaction, which fully derisks the capital costs required to bring Salamanca into production,” said Berkeley MD Paul Atherley, welcoming the Oman fund as a strategic, long-term investor and shareholder in the company.

Atherley noted that, with the funding in place, Berkeley would now award the main engineering, procurement and construction and mining contracts and would begin major earthworks in the new year, focusing on the installation of the crushing circuit.

“The Salamanca mine, with some of the lowest operating costs globally, is being constructed at the bottom of the uranium price cycle,” he added, pointing out, however, that spot uranium prices had risen sharply since Canadian miner Cameco announced early this month that it had temporarily suspended production from its McArthur River mine, owing to sustained uranium price weakness.

Atherley said Berkeley expected more supply to be removed from global markets, as higher-cost operations are likely to be forced to closure once historical sales contracts expire.

However, he believes that when production at Salamanca commences, the market will be dominated by US utilities looking to recontract, as well as those competing with Chinese and Japanese reactor demand.