LONDON (Alliance News) - Berkeley Energy Ltd Monday said it is aiming to make the Salamanca project in Western Spain "the world's lowest cost producer" of uranium after the Zona 7 deposit transformed the economics of the project.
In early November, Berkeley integrated the high-grade Zona 7 deposit into the wider Salamanca project which pushed the project value up to USD871.3 million, or GBP580.9 million, whilst pushing down capital expenditure and operating costs and extending the mine life.
On Monday, Managing Director Paul Atherley said: "The near-surface high-grade Zona 7 deposit has transformed the economics of the project largely due to an increase in grade. We are now focussed on further reducing the operating costs with the aim to make the Salamanca project the world's lowest cost producer."
Berkeley said early indications of the optimisation studies at Salamanca have shown the inclusion of the Zona 7 deposit would improve the average grade by 42% in the first ten years of production, but also said there is room for further improvement, particularly in the material handling scheduling, strip ratio, the mining unit rates, and the fixed costs associated with grade control drilling and assaying.
"The optimisation forms part of the definitive feasibility study required by financiers and offtake parties to enable funding and sales contracts to be put in place ahead of the commencement of construction in mid-2016," said Berkeley.
The company said it will publish its interim results in the new year, when it will provide some guidance on the progress of the optimisation studies.
Fellow AIM-listed Anglo Pacific Group PLC has a 1% net smelter royalty over all production from Berkeley's operations in Spain and Portugal under a deal signed back in December 2009. Anglo Pacific paid AUD4.0 million to gain that royalty. Anglo Pacific also holds a 16.75% equity interest in Berkeley at a corporate level.
Berkeley shares were down 1.9% to 24.29 pence per share on Monday morning whilst Anglo Pacific shares were up 0.8% to 65.25p.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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Berkeley Eng (BKY)