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LONDON (Alliance News) - Berkeley Energia Ltd on Friday reiterated its assertion that the Salamanca project in Spain will be one of the world's lowest cost producers of uranium as it continues to develop the asset on multiple fronts.
The company, formerly known as Berkeley Resources, transformed the project in late 2015 when it released a pre-feasibility study for the high-grade Zona 7 deposit which proved the project had robust economics.
Berkeley Energia demonstrated the quality of the deposit earlier this week when the latest round of drilling hit intersections with grades up to eighteen times higher than the average grade of the resource at the project.
The development of the Zona 7 deposit helped the company bring the costs at the overall project down to very competitive levels, with a predicted operating cost of around USD15.60 per pound of uranium - less than half of current spot price of uranium, according to the company.
Berkeley Energia also boasted the project has one of the industry's lowest capital costs to first production at an estimated USD81.0 million - an important factor in light of weaker commodity markets that have pressured many miners to revise, delay or even cancel new project development.
"Salamanca is expected to be one of the few projects in the world that commences development in 2016 and will be ideally placed to benefit from the forecast rise in demand for uranium from 2018 onwards," said the company.
The project is made up of several deposits within the project area, including the Retorillo deposit, which lies next door to the flagship Zona 7 deposit, and the Alameda and Gambuta deposits.
The latest drill results from Zona 7 provided intersections which showed there could be a possible extension to the mineralisation at depth - providing potentially more high-grade resources to target, whilst a 15% increase in the grade of the Retortillo resource emphasised the project's robust economics at current uranium prices, Berkeley Energia said.
An exploration programme will commence shortly to follow-up these broad, high-grade intersections, and also target multiple Zona 7 deposits elsewhere on the licence, the company said.
In addition, all major permits are now in place allowing initial infrastructure development to commence in March of this year, and the company said there has been "strong interest" from financiers, strategic partners and potential off-take partners about participating in the project.
Several of the parties that have shown interest have commenced detailed due diligence reviews following extensive engagement with management during the quarter, said Berkeley Energia.
As the project stands, it has a net present value of USD353.3 million and will create over 2,700 valuable direct and indirect jobs in a rural community in western Spain, around three hours from Madrid, which has been hard-hit by intergenerational unemployment.
Berkeley Energia shares were trading down 3.0% to 24.25 pence per share on Friday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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