TIDMBKY
RNS Number : 9975Z
Berkeley Energia Limited
21 March 2017
BERKELEY ENERGIA LIMITED
NEWS RELEASE | 21 March 2017 | AIM/ASX: BKY
EU welcomes the development of the Salamanca mine with approval
of first offtake contract
Berkeley Energia is pleased to announce that the European Union
has welcomed the development of the Salamanca mine by approving the
Company's offtake agreement for the sale of the first
production.
The EURATOM Supply Agency, the governing body for all nuclear
fuel transactions within the European Union, has concluded that the
agreement is in accordance with Article 52 of the EURATOM Treaty
and has countersigned the agreement.
EURATOM has advised:
"We particularly welcome the emergence and development of a new
EU based uranium mining project and believe that it will contribute
to the security of supply of natural uranium for the Community
users."
In November 2016, the Company entered into a sales agreement
with Curzon Resources Limited, formerly known as Interalloys
Trading Limited, for a total of two million pounds of uranium over
a five-year period, with scope to increase to a total of three
million pounds.
The agreement is for an average fixed price of US$43.78 per
pound of contracted and optional volumes, which compares favourably
to the current spot price of US$25 per pound and establishes a
strong cash margin above the steady state production costs of
around US$15 per pound.
The Company is in discussions with other potential off-takers in
relation to contracts with terms similar to those outlined in the
Interalloys Agreement with pricing at or around long term benchmark
levels for term contracts. Contracts for sale will be entered into
in the ordinary course of business as the Company progressively
builds its sales book with high quality offtakers.
Construction of the mine has commenced and is on track for first
production in late 2018, which coincides with a large number of
European and US utilities looking to re-contract at the same time
as the Chinese new reactor demand comes on line.
Managing Director, Paul Atherley, commented:
"We welcome the support from the European Union for our maiden
off-take contract from the Salamanca mine, which is in construction
and due to commence production next year.
At full production, Salamanca will be Europe's largest uranium
producer accounting for 10% of the total requirement and will be
important to the EU's security of supply, which currently relies on
Russia, Kazakhstan and Niger for almost 60% of its uranium.
We are very encouraged by the strong and growing support for the
investment in the Salamanca mine amongst all our stakeholders, not
just from the EU but also from the various levels of government and
community, as evidenced by the rising number of job applications
from within the local villages.
Berkeley's investment into the Castilla y Leon region is in line
with the EU and Spanish government's desire to rejuvenate regional
communities badly hit by underinvestment and enduring high levels
of long term and youth unemployment.
The Salamanca mine will create over 450 permanent jobs once the
mine is in full production and it has been estimated that our
investment will generate a further 2,295 new jobs in the
region."
For further information please contact:
Berkeley Energia Limited +44 20 7478 3900
Paul Atherley, Managing Director info@berkeleyenergia.com
Hugo Schumann, Corporate Manager
Peel Hunt LLP (Joint Broker) +44 20 7418 8900
Matthew Armitt
Ross Allister
Chris Burrows
WH Ireland Limited (Nominated
Adviser) +44 20 7220 1666
Paul Shackleton
Nick Prowting
Jay Ashfield
Buchanan +44 207 466 5000
Bobby Morse, Senior Partner BKY@buchanan.uk.com
Anna Michniewicz, Account Director
About Curzon Resources Limited:
Curzon Resources, formally known as Interalloys and founded in
1993, is a privately funded commodity trading company specializing
in the purchase, sale and distribution of commodities to a global
customer base.
Curzon Resources continues to add to its expanding portfolio of
offtake and distribution agreements. Working hand-in-hand with mine
owners the company provides a route to market; logistics, capital
and marketing.
Headquartered in Europe and with satellite operations worldwide
Interalloys provides global coverage with local know-how to ensure
the best cultural and strategic fit to its suppliers and
customers.
Further background:
Berkeley Energia's Salamanca mine
Berkeley Energia's objective is to be one of the world's lowest
cost producers reliably supplying the world's leading utilities
with fuel for base load clean energy from the heart of the European
Union. Once in production the mine will be one of the world's
biggest producers supplying over four million pounds of uranium
concentrate a year, equivalent to approximately 10% of the
continent's total requirement.
An independent study published in July 2016 by MDM Engineering
(part of AMEC Foster Wheeler Group) reported that the project has
an NPV of over US$530 million and will produce 4.4 million pounds
of uranium per annum at a cash costs of US$15.39 per pound, making
it one of the world's lowest cost and a top ten global producer of
uranium.
The mine will rejuvenate a community suffering from lack of
investment and badly hit by long-term and high youth unemployment.
Last year over 25,000 people left the Castilla y Leon region and in
many villages houses stand empty.
Skills training programmes commenced last year and will continue
throughout the construction phase to equip locals for the 454 jobs
the mine will create once in full production. In addition, it has
been estimated that over time the mine will indirectly generate an
estimated further 2,295 jobs in the region. Local businesses are
being prioritized and the local municipalities and communities will
be fully supported throughout the life of the mine.
Spain currently is currently generating around 20% of its
electricity from seven nuclear power plants and is aiming to meet
its long term carbon reduction targets with a combination of a
nuclear zero carbon base load and renewables.
Competent Persons Statement
The information in this announcement that relates to the
Definitive Feasibility Study, Mineral Resources for Zona 7, Ore
Reserve Estimates, Mining, Uranium Preparation, Infrastructure,
Production Targets and Cost Estimation is extracted from the
announcement entitled 'Study confirms the Salamanca project as one
of the world's lowest cost uranium producers' dated 14 July 2016,
which is available to view on Berkeley's website at
www.berkeleyenergia.com.
Berkeley confirms that: a) it is not aware of any new
information or data that materially affects the information
included in the original announcement; b) all material assumptions
and technical parameters underpinning the Mineral Resources, Ore
Reserve Estimate, Production Target, and related forecast financial
information derived from the Production Target included in the
original announcement continue to apply and have not materially
changed; and c) the form and context in which the relevant
Competent Persons' findings are presented in this announcement have
not been materially modified from the original announcements.
The information in the original announcement that relates to the
Definitive Feasibility Study is based on, and fairly represents,
information compiled or reviewed by Mr. Jeffrey Peter Stevens, a
Competent Person who is a Member of The Southern African Institute
of Mining & Metallurgy, a 'Recognised Professional
Organisation' (RPO) included in a list posted on the ASX website
from time to time. Mr. Stevens is employed by MDM Engineering (part
of the Amec Foster Wheeler Group). Mr. Stevens has sufficient
experience that is relevant to the style of mineralization and type
of deposit under consideration and to the activity being undertaken
to qualify as a Competent Person as defined in the 2012 Edition of
the 'Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves'.
The information in the original announcement that relates to the
Ore Reserve Estimates, Mining, Uranium Preparation, Infrastructure,
Production Targets and Cost Estimation is based on, and fairly
represents, information compiled or reviewed by Mr. Andrew David
Pooley, a Competent Person who is a Member of The Southern African
Institute of Mining and Metallurgy', a Recognised Professional
Organisation' (RPO) included in a list posted on the ASX website
from time to time. Mr. Pooley is employed by Bara Consulting (Pty)
Ltd. Mr. Pooley has sufficient experience that is relevant to the
style of mineralization and type of deposit under consideration and
to the activity being undertaken to qualify as a Competent Person
as defined in the 2012 Edition of the 'Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves'.
Forward Looking Statements
Statements regarding plans with respect to Berkeley's mineral
properties are forward-looking statements. There can be no
assurance that Berkeley's plans for development of its mineral
properties will proceed as currently expected. There can also be no
assurance that Berkeley will be able to confirm the presence of
additional mineral deposits, that any mineralisation will prove to
be economic or that a mine will successfully be developed on any of
Berkeley's mineral properties.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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