JOHANNESBURG (miningweekly.com) – ASX- and Aim-listed Berkeley Resources on Tuesday announced that it would progress to the exploitation phase of its Salamanca uranium project, in Spain.
The Salamanca uranium project, which comprises the Aguila, Alameda, Retortillo and Villar mining areas, has a number of identified uranium deposits with mineral resources totalling 71,2-million pounds of uranium oxide and substantial exploration upside.
The decision to exploit the project follows the submission of the exploitation plan to Enusa Industrias Avanzades SA (Enusa) in November 2010. The collaboration agreement between the two companies resulted in the incorporation of a new joint-venture (JV) company within 60 days, which will own and operate the Salamanca uranium project.
Berkeley would own 90% of the JV, with Enusa retaining a 10% free-carried interest. The new company would submit the exploitation plan to the central government of Spain.
A payment of about A$26-million would further be made to Enusa within 90 days, in exchange for the transfer of the Enusa-owned elements of the Salamanca uranium project into the JV company.
Meanwhile, the exploration and development group had also arranged a fully underwritten capital raising of A$55-million, at A$1,70 a share, of which A$26-million is subject to shareholder approval.
Acting MD Henry Horne said that the progress to exploitation and the capital raising were seminal events in the development of the Salamanca uranium project.
“It will accelerate the permitting process, enable further optimisation, including the commissioning of a pilot plant, and provide the funding capacity to explore a new generation of exploration targets," he noted.
The company has entered into agreements with RBC Capital Markets, BMO Capital Markets and Dundee Securities Corporation, whereby RBC and BMO have agreed to jointly underwrite an equity raising of the A$55-million, through a placement to institutional investors.
These funds would be used to meet the cost of the A$26-million payment to Enusa, fund further feasibility steps that would include a 1 200-hour pilot plant operation and enable the exploration drilling of high-quality targets within the State reserves and adjacent Berkeley tenements.
In August, Berkeley also signed a memorandum of understanding (MoU) with the Korea Electric Power Corporation (Kepco) to finance and develop the Salamanca uranium project.
The MoU stipulated that Kepco would invest around $70-million for a 35% interest in the Salamanca project. Kepco would also contribute the funding of 35% of the development costs needed to bring the project into production, as well as its 35% of its operating expenditure.
Berkeley started the feasibility study process on the Salamanca project in May 2009.
Earlier this week, Russian steel company Severstal’s proposed takeover of Berkeley fell through, after the two companies failed to agree on a deal before the January 14 deadline.