The Salamanca project is being developed in an historic uranium mining area in western Spain about three hours west of Madrid

Salamanca project map

Mining analyst Michael Stoner:

“It is only with the highest quality assets that you can consider development of a mine through a decade-long low in the commodity price.”

In July 2016 Berkeley published the results of a Definitive-Feasibility Study confirming that the Salamanca project will be one of the world’s lowest cost producers, capable of generating strong after tax cash flows through the current low point in the uranium  cycle.

The project has a Net Present Value of US$531.9 million  with an internal rate of return of 60% based on a discount rate of 8%.

The Definitive Feasibility Study has reported that over an initial ten year period the project is capable of producing an average of 4.4 million pounds of uranium per year at a cash cost of US$13.30 per pound and a total cash cost of US$15.06 per pound during steady state which compares with the current spot price of US$20 per pound and term contract price of US$41 per pound.

With operating costs almost exclusively in Euros and a revenue stream in US dollars the project is expected to continue to benefit from the effects of deflationary pressures within the EU.

Established infrastructure, latest techniques

Salamanca Spain

The project benefits greatly from the well-established EU funded infrastructure in the region with an initial capital cost of only US$93.8 million which is low by international standards for a project of this size.

The Company has established a good neighbour and business partner relationship with the local community. In addition to the creation of 450 direct jobs and up to 2,000 indirect jobs in a community hard hit by long term unemployment, the Company is actively support the local businesses and the activities of the local municipalities.

The mine design incorporates the very latest thinking on minimal environmental impact and continuous rehabilitation such that land used during mining and processing activities is quickly restored to agricultural usage.

In August 2016 the Company entered the development phase and began initial infrastructure work on site. Development work commenced on the road realignment and power line upgrade ahead of main construction.

Following last year’s US$30 million equity raising, the Company is now accelerating the development of the Salamanca project, including construction of the crushing circuit and other infrastructure items.

Amec Foster Wheeler, which is carrying out the Front End Engineering Design, has made contractual enquiries for the key equipment for the crushing circuit and plant construction commenced in July 2017 with the arrival on site of the primary crusher.