The Salamanca project is being developed in an historic uranium mining area in western Spain about three hours west of Madrid
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
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 supporting local businesses and the activities of 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 a US$30 million equity raising in 2016, the Company commenced initial construction in July 2017 when the primary crusher was delivered to site.
Last year, the Company signed US$120 million sovereign wealth fund strategic investment to fund the Salamanca mine into production.
In July 2018 the Company successfully listed on the Main Board of the London Stock Exchange and on all four Spanish Stock Exchanges, becoming Spain’s only listed mining company.