Berkeley Energia Share Discussion Threads

[herlat1] 02/12/2016 10:34

Snowyflake you have obviously done well out the stock if you sold recently. Are you like Kreature short now?

[snowyflake] 01/12/2016 06:49

herlat1 -I am not a director of RCF and so I cannot answer that.

May I invite you to re-read the RNSs for the past two years and advise me if BKY have announced that BKY has the local and National permits to build the mine and not just initial infrastructure.

[herlat1] 30/11/2016 22:30

Snowflake so why did RCF invest at a premium after extensive due diligence ?

[snowyflake] 30/11/2016 15:58

herlat1 - I was a holder of BKY but sold because the company do not have a national or local permit to construct a mine. The company has a permit ONLY for initial infrastructure.

It dawned on my pea brain that no mine means no production no production means no sales. You can have all the off take agreements in the world but if you cannot fulfil them you make no money.

Also we do not know the status of the alleged legal proceedings. I got in touch with a British private investigator in Spain. It would not have been cheap to instruct him to make enquiries of the court system in Spain and I left it at that.

[herlat1] 30/11/2016 02:17

Kreature how is that short of yours at 42 pence looking?

[kreature] 30/11/2016 01:00

I gather from the Spanish blog that....first they need the change of land use permit, then there's the ongoing National Court appeal to worry about...... and if they do start mining there could be an appeal to the CJEU ?

[europa79] 29/11/2016 20:08

Well, all things considered, that's a nice looking chart. Very nice if we can break 50 of course!

[greedfear] 29/11/2016 12:37

An uplift in uranium spot price would be needed for that I guess.
I'm sure that will happen soon.
Berkeley has done very well compared to other uranium plays.
There's a lot to chose from at bargain prices.
I've recently started building up a uranium portfolio and it's difficult because there's so much to chose from.

I've got a strong feeling uranium will take off all of a sudden, soon and it'll be explosive.
A lot of reasons for that to happen.

P.S. I like Berkeley a lot.

[liambilson] 29/11/2016 11:59

Yet depressingly 20% off its highs and stuck in exactly the same spot as 3 months ago despite all the newsflow.
I have a lot of this and am keeping the faith but what exactly will start driving this share price forward to broker targets and when ?

[snickerdog] 29/11/2016 08:56

WH Ireland raised their target price this morning to 128p.
I've pasted the exec summary from their note below but can't . BKY usually make these available on their site at some point this one is just out this morning.

Berkeley Energia*#
Funded to accelerate construction
Berkeley Energia’s wholly owned Salamanca project in western Spain is one of the stand-out uranium development projects globally. Capital and operating costs are set to be among the lowest in the world, demonstrating that the project is able generate
strong returns, even in today’s depressed uranium market. Berkeley’s oversubscribed $30m raise in London demonstrates that the project has the support of the City’s major institutional investors. The funding allows the company to accelerate construction of the processing plant, complete land acquisition and fund other capital items in the first half of 2017. Berkeley is building its book of off-take contracts with major utilities and traders, with its first contract at over $40 per pound U3O8. Whilst funding of the remaining capital remains a risk, Berkeley’s preferred way to fill the gap is through the sale of a strategic stake in the project and is in discussion with several interested parties who are currently undertaking detailed due diligence. We maintain our Buy recommendation and raise our target price to 128p (from 120p) on US$ changes and as the risk is reduced.
• The feasibility study for the Salamanca project showed that a 4.4Mlbs/a U3O8 uranium producer can be built. The initial capital cost is low at US$96m to bring Retortillo into production, followed by US$60m for Zona 7 in year 1 and then US$81m for Alameda in Year 2. The operation runs at a very low operating cost of US$17.3/lb U3O8 – which includes operating cost, royalties and marketing costs. – falling to US$15.3/lb U3O8 when Zona 7 is in production. Zona 7 is the driver behind the economics for the project and the outstanding returns
• We have calculated an NPV10 for the Salamanca project of US$891m (and an IRR of 67%) using consensus forecasts for the uranium price and with a long-term uranium price of US$65/lb U3O8. The project benefits from the extensive EU-funded infrastructure in Spain with cheap sulphuric acid available domestically. The89s also widespread local support for the project.
• Strong institutional support for the project as evidenced by the recent placing to raise $30m which was oversubscribed. Finalising funding is the next major milestone for the company. Berkeley has completed US$40m of its ~$120m initial financing required to build the mine and fund working capital; a $10m royalty financing (equity and royalty) with Resource Capital Funds and $30m with London-based institutions via a placing. Berkeley’s stated aim is to fund the remainder by the sale of a strategic stake in the project – an achievable aim given the returns expected from the project and its low margin risk.
• Initial funds will allow for the acceleration of construction and bring forward the construction of the crushing circuit and other facilities to early next year.
• Strong pipeline of off-take contracts is expected. This week Berkeley converted a Letter of Intent with Interalloys into a binding agreement for 2Mlbs/yr over a five-year period, at an average fixed price of $43.78/lb. The Company continues to submits tenders to major Asian and US utilities to build its book of offtake contracts.
• Berkeley continues to drill the below Zona 7 and new anomalies to expand geological resources. Conversion of Inferred Resources to a higher level of confidence will enable production to be maintained at >5Mlbs/a U3O8, which is not yet factored into our model.
• Our valuation uses a DCF (NPV10) for the Salamanca Project with an allowance for Berkeley corporate costs and cash on hand (WHI est.). The analysis uses a consensus long-term price of US$65/lb U3O8 from 2020. The project is most sensitive to uranium price, but even if the long-term uranium price were to be 40% below our long-term price (i.e. current term prices) the project still makes significant returns for shareholders. We maintain our Buy recommendation and raise our target price to 128p from 120p..

[snickerdog] 28/11/2016 12:48

BKY presenting at the Mines and Money show tomorrow - passes are free to bayside investors which I presume cover private investors. Quite a big show apparently. There's link above.

[snickerdog] 28/11/2016 12:45

Berkeley have caught to eye of Growth Company Investor who don't really feature mining stocks very much. Lots in the press recently and it keeps on coming.

Berkeley Energia’s nuclear options

Worldwide, the nuclear power industry is expanding, and uranium mining business Berkeley Energia is set to benefit from future price rises in the radioactive material

The business

However, the demand picture looks quite interesting. There was a lot of soul searching in the aftermath of Fukushima, with Germany moving to close down its nuclear power stations. Elsewhere, though, the industry is expanding. All told there are 447 operating reactors at the moment and 59 under construction, an increase of 13 per cent. A further 168 are planned and twice that number are at the proposal stage.

China leads the way with six to eight new builds each year and wants 10 per cent of its energy to come from nuclear. Rising demand and lack of new mine capacity should tighten the uranium market over time, so this looks like an opportunity to invest at the bottom of the price cycle.

We have tended to avoid the mining sector given the carnage over the past few years. Although it hit a decisive bottom at the beginning of this year, we still want to set a high bar when considering new investments in the industry. Berkeley Energia comfortably passes our key tests. It plans to mine an attractive commodity at very low cost in a good location. It is also well funded, having just completed an important round of financing.

Berkeley is developing the Salamanca project in Spain, which will be Western Europe’s only uranium mine. Uranium prices have been depressed since the Fukushima nuclear accident in 2011. Most trade in the metal is carried out under long-term contracts, but the spot uranium price has been languishing around the $20 per pound level. Its peak in 2007 was well over $100. Prices then fell sharply after the financial crisis but were recovering to above $70 at the time of Fukushima. Contract prices are currently in the $40 region, which is a good premium to spot, but creates little incentive for producers to increase supply and build new mines.

The big attraction of the Salamanca project is its cost profile. The initial capital cost of $95.7 million is low for a mine of its size. This is helped by the general drop in equipment and contractor costs given the recession in the industry and by its favourable location in Spain, with good-quality existing infrastructure and proximity to the port of Santander. Construction is expected to be straightforward with no obvious risks that might cause delays. There’s strong local support for the project given high regional unemployment.

Operating cash costs are expected to be around $15 per pound, which is right at the bottom of the uranium industry’s curve, which has an average of over $30. The Salamanca ore grades are high and, being close to the surface, are easy to mine in an open pit. Recovery rates are expected to be very high despite using a low-cost heap leaching process. As well as low operating costs due to needing less power than a milling and tank leaching approach, this process is also less capital intensive.
experience in project management and mining development, including building new mines in Spain.

There are three ore bodies in the project, two of which are close together. One of these, Retortillo, should start production in the second half of 2018. Phase two is Zona 7, which is the most profitable ore body and should be on stream around a year later. Production will then concentrate on Zona 7 to maximise cash flow early in the project’s life and generate the funds to develop the third body, Alameda, which is 35 km distant.

Spanish uranium should be attractive to buyers since, apart from Canada and Australia, the most significant producers are the less predictable territories of Kazakhstan, Russia and Niger. And with 4.4 million pounds per annum, Salamanca will be in the top dozen or so of world producers. This should help Berkeley build a book of offtake contracts in the run-up to initial production. A first letter of intent has been signed with a trading house indicating a $41 price. Therefore, even at what looks like the low point of the cycle for uranium, this project should be a winner.

Financials and Management

Paul Atherley is MD and is a mining engineer with over 25 years of operating experience. The general manager of operations is Francisco Bellon, who has more than 20 years’ experience in project management and mining development, including building new mines in Spain.

Obtaining and structuring the finance for the project is a vital component of the story. The initial infrastructure work is already underway, with the main period of construction being 12 months from the middle of next year. Berkeley has just raised $30 million in a placing at 45p, which was the prevailing share price. This adds to the $10 million it had in the bank at the end of October and will cover the crushing circuit at the processing plant. However, a further $80 million will be needed to complete the project and move into production.

Outlook and valuation

The upside potential for the uranium price has been discussed earlier and stands to add a lot of value to Berkeley if it comes about. Broker Peel Hunt assumes in its forecasts that the long-run price rises modestly and stays well below its peaks of the previous cycle. Using conservative funding assumptions it then derives a net asset value of 102p. As well as the uranium price, there’s also upside potential to this valuation from revisions to the size of the ore body. Drilling around Zona 7 suggests the mine’s life could be extended beyond the current 14-year estimate.

[wiseacre] 28/11/2016 10:00

I am surprised at the lack of interest on this board, currently, on one of the best performing stocks in the market. I don't believe this company will be independent in a year's time. Takeout price 150p?

[maffoo] 22/11/2016 19:32

Another one: hxxp://www.ibtimes.com.au/experts-see-hike-uranium-price-more-countries-build-nuclear-reactors-1534399

Also, has someone just come along and downvoted people's replies? Don't quite get it, we're all trying to be helpful...

[tromso1] 22/11/2016 16:44

Proactive Investors - Uranium price tipped to soar after Kazakh strategy shift

[sideshowbull] 21/11/2016 16:42

You have to wonder with U308 at lows, how they are going to make up the deficit that we all know is looming. I think Uranium will be a massive bull and it may happen at any moment when the light goes on, or out for that matter!

BWTFDIK

sideshow

[maffoo] 21/11/2016 08:40

Yes, I apologise; should've mentioned that the article isn't entirely about BKY, just they feature largely in it. Will be interesting to see if the MSM feature will have any effect on the price!

[sideshowbull] 21/11/2016 08:03

Very good read, however the chart is for URA, uranium resources plc.. Def worth looking at though.

[snickerdog] 20/11/2016 18:41

It's a big piece, was worth a read, very in depth for a broadsheet too.

[maffoo] 20/11/2016 18:19

Recent post in the telegraph regarding Berkeley

[zebbo] 09/11/2016 23:52

Don't think there will be any legal battle....sounds like some hot air and most permitting is complete now anyway
The mine is well supported locally, but as usual there are a few that don't want the mine. This is not a unique situation.

Bottom line this a great buy for med to long term

[herlat1] 09/11/2016 11:36

Thanks Lango !Good news that the mainstream Spanish media is now getting right behind the project.Cinco Dias is one of Spain's leading financial daily newspapers and it makes it clear that the mine is going ahead. The headline reads: "Europe's largest uranium mine is going ahead despite the fall in uranium prices" Europe's largest open-cast uranium mine plans to begin production in two years' time. Berkeley Energia has announced its plan for the Retortillo facility after raising 30 million dollars from a share placement despite uranium prices falling to an 11-year low.

[langostino] 09/11/2016 09:19

'A long legal battle ahead'

hxxp://cincodias.com/cincodias/2016/11/07/empresas/1478544718_949534.html