LONDON (Alliance News) - Anglo Pacific Group PLC on Friday said it was "encouraged" by Berkley Energia Ltd's independent definitive feasibility study on the Salamanca uranium project in Spain published on Thursday, which showed annual profit from the asset should be around USD116.0 million.
Anglo Pacific has a 1.0% net smelter return royalty applicable to production from Berkeley Energia's Spanish and Portuguese assets for AUD4.1 million, which continues to be the assets' carrying value. Anglo Pacific also holds 30.3 million shares in Berkeley Energia.
On Thursday, Berkeley posted the definitive feasibility study for the Salamanca project in Spain, which confirmed that the project will be one of the world's lowest-cost uranium projects and could generate a net profit after tax of USD116.0 million based on cost projections and prices.
The study said the project was capable of producing an average of 4.4 million pounds per year or an average of 3.5 million pounds of uranium per year over a 14 year mine life.
Anglo Pacific said this was "significantly higher" than the rate of production assumed when it purchased the royalty in December 2009, due to "the considerable increase in resource discovered by Berkeley over the past twelve months".
First production from the project is expected in 2018, Anglo Pacific said.
"We are encouraged by the timely release of this positive definitive feasibility study. Based on Berkeley Energia's long-term contracted uranium price assumptions, the project should generate average gross annual sales revenue of approximately USD180.0 million," said Anglo Pacific Chief Executive Julian Treger.
Shares in Anglo Pacific were down 0.3% at 84.75 pence on Friday morning, while shares in Berkeley Energia were down 1.3% at 37.50p.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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