Sign up Australia
Proactive Investors - Run By Investors For Investors

Berkeley Energia to accelerate Salamanca development as it raises cash

Berkeley is looking to raise between £16.1mln and £24.1mln
The picture shows the drill rigs turning on Salamanca
Drill rigs turning at Salamanca

Berkeley Energia Ltd (LON:BKY, ASX:BKY) has raised £24.1mln as it looks to accelerate the development of its Salamanca uranium project in Spain.

The miner asked existing and other institutional investors to stump up between £16.1mln and £24.1mln through a placing of shares at 45p – a similar level to yesterday’s close.

Berkeley said the placing was heavily oversubscribed by institutional investors keen to back the mine development at Salamanca in Spain.

The cash will fund the construction of the crushing circuit at the centralised processing plant, as well as other infrastructure items, Berkeley said.

"The placing has been heavily oversubscribed by London based blue chip generalist institutions who will dominate the register once settlement completes."

"This successful financing is a positive endorsement of the Salamanca project, a US$100mln project that will be Europe's only major uranium mine and one of the world's biggest producers," said managing director Paul Atherley.

The development of the US$100mln project is well underway with work having started back in August.

Once complete, the mine will be Europe’s only major uranium mine and will produce over 4mln pounds of the silvery-white metal each year.

Back in September, the company announced that it had signed an outline agreement to supply the commodity trading firm Interalloys with the first million pounds of output.

The average selling price was expected to be around US$41 per pound, although broker Shore Capital thinks it might end being lower than that.

“The spot price at the time was US$24.88/lb, whereas spot is now US$18.75/lb, so we would not be surprised to see a price in the US$30/lb region in the finalised offtake contract,” Shore’s Yuen Low said.

He added that the economics will “remain attractive” even if the selling price falls to around US$30, while he claimed the project has the potential to yield much better figures.

“We reiterate our belief that there is good potential for significant ‘near-mine’ Zona 7-style discoveries (and indeed, depth and strike extensions of Zona 7 itself), which could see costs fall and project economics improve further.”

Shares were down 3% to 44.2p.

--Updates for share price, placing result and broker comment--

View full BKY profile View Profile

Berkeley Energia Timeline

Related Articles

coffee beans
April 26 2018
The company’s focus is the Arapua fertiliser project, located about 400km south-east of Brasilia in the State of Minas Gerais, a major agro-industrial centre.
February 14 2018
Berkeley Energia is funded to production, and set to make a significant impact on the uranium market
Montepuez Ruby Project Processing Plant
April 03 2018
The Caula Graphite Vanadium Project could achieve first production by mid-2019.

No investment advice

The information on this Site is of a general nature only. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions. You acknowledge and understand that neither the Company, its related bodies corporate, the information providers or their affiliates will advise you personally about the nature, potential value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter. You should read our FSG and any other relevant disclosure documents and if necessary seek persona advice prior to making any investment decision.

You understand and agree that no Content (as defined below) published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person.

You understand that in certain circumstances the Company, its related bodies corporate, the information providers or their affiliates may have received, or be entitled to receive, financial or other consideration in connection with promoting, and providing information about, certain entities on the Site and in communications otherwise provided to you.

You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate. From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Before you act on any general advice we provide, please consider whether it is appropriate for your personal circumstances.

© Proactive Investors 2018

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use