RNS out6 Jul 2017 08:34
Capital costs for Salamanca reduced by 1% to € 82.3 million
The capital cost for the construction of Berkeley Energia's ("Berkeley" or "the Company") Salamanca mine has reduced to € 82.3 million (US$ 93.8 million), a 1% reduction over previous estimates, confirming the project's status as one of the lowest cost uranium mine developments in the world today.
The project benefits from well-established EU infrastructure and a highly competitive cost environment combined with short lead times for major equipment items.
The estimate for bringing the Retortillo deposit into production was prepared as part of the Front-End Engineering and Design ("FEED") by Amec Foster Wheeler Group, one of the world's largest engineering groups.
The FEED is the execution phase of the project during which the overall engineering and process design is translated into equipment procurement packages and awards to specialist sub-contractors. A number of Spain's most reputable engineering groups have provided their input into the Company's study work, including Madrid IBX-35 listed companies Ferrovial and OHL.
The final capital costs reflect all detailed design work carried out during the FEED, and resulted in an update to the nature and quantity of materials required to build the Salamanca mine, with costs from contractors and suppliers being amended based on final bidding packages.
The FEED study reported that final up-front direct costs for the Salamanca mine are € 74.7 million (US$ 85.1 million), 1% below estimates from the Definitive Feasibility Study ("DFS") released in July 2016 (which used 1 April 2016 as the CAPEX estimating base date).
The main drivers of the optimisation were:
· An improved sequencing of the project
· An update to the design of the Leach Pad
· Improved materials handling
· Optimised design of civils based on detailed ground conditions
· Extensive procurement exercise optimising the sourcing of materials and contractor / supplier negotiations
Breakdown of updated Retortillo capital costs
Description
Cost (€ million)
Mining
4.2
Waste Dumps, Water Management, etc.
3.3
Process Plant
60.8
Other Capex
4.3
G&A
2.1
Total Direct Costs
74.7
Indirect Costs
7.6
TOTAL COSTS
82.3
The Company will continue to pursue cost optimisation opportunities as it commences full construction this summer, which includes the evaluation of the indirect costs.
Managing Director, Paul Atherley, commented:
"The FEED has confirmed Salamanca as one of the world's lowest cost uranium mines to develop.
"Since our successful fundraise late last year, the site has been prepared for full construction and we now have nearly 70 staff and contractors on site. The strong support from local communities is at the heart of the Salamanca mine. Berkeley is fully committed to further its recruitment drive and tr
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