Berkeley Energia Limited Pre-construction activities advancing at Salamanca (0567D)

TIDMBKY

RNS Number : 0567D

Berkeley Energia Limited

24 April 2017

BERKELEY ENERGIA LIMITED

NEWS RELEASE | 24 April 2017 | AIM/ASX: BKY

Pre-construction activities advancing at Berkeley Energia's Salamanca mine

Berkeley Energia is pleased to announce that the pre-construction site based activities are advancing at its 100% owned Salamanca mine located in a historic mining region in western Spain.

Work on the ground in preparation for the commencement of construction has progressed well with over 600 hectares acquired or leased to date under the land acquisition programme and with only a few hectares remaining to be acquired.

The road deviation is advancing and the new road will be ready for use in the European summer. The equipment procurement for the electrical power line has been completed and the upgrade to the existing line will commence once the road construction is complete.

The crushing circuit, screens, feeders and ancillary equipment are currently being fabricated by established equipment suppliers, Sandvik in Finland and Vibramech in South Africa.

The Company has entered into a preliminary agreement with Asturiana de Zinc SAU, a Glencore company, to supply locally sourced reagent from 2018 to 2021 at a cost substantially below the one estimated in the Definitive Feasibility Study. These reagent costs represent approximately 30% of the overall process operating costs.

In addition, the Company has now received final proposals from a number of experienced and reputable mining contractors and has been pleased with the highly competitive nature of the bids received.

The Company is building a successful track record of cost optimisation, the order of the first major items for the crushing circuit, placed in December last year, was more than 20% below estimates from the Definitive Feasibility Study.

The Company will continue to pursue cost optimisation opportunities as it proceeds towards production to ensure that the Salamanca mine establishes itself at the bottom of the cost curve in terms of capital and operating costs once in production.

The Company holds itself to the highest standards and its commitment to environmental excellence is evidence of this. The Environmental License and the Environmental Measures Plan detail that the Company will plant 30,000 young oak trees, a six-fold increase on the number of older trees being cleared, greatly improving the ecological and agricultural value of the area.

This reforestation has now commenced following an agreement with the highly supportive local municipality of Vitigudino which details the arrangements for planting 20,000 young oak trees over a 50 hectare plot.

Commenting on the progress of the Salamanca mine, Managing Director Paul Atherley, stated:

"Since our oversubscribed institutional fundraise late last year, we have been delivering on the site-based activities leading up to the main construction, which we expect will commence later in the year.

We now have over 50 staff and contractors on site and are continuing to take on more staff from those local people who have attended our skills training courses as construction commences.

Our continued operating and capital cost optimisation moves us closer to establishing Salamanca as a reliable low cost supplier to global utilities from the heart of the Europe Union.

Euratom has welcomed the security of supply Salamanca brings to the European Community which generates over 25% of its electricity from nuclear power.

The European nuclear trade body Foratom has described nuclear power as indispensable to the EU's aim to decarbonise the economy by more than 80% by 2050."

For further information please contact:

 
 Berkeley Energia Limited                      [phone] 
 Paul Atherley, Managing Director      [e-mail] 
 Hugo Schumann, Corporate Manager 
 
 Peel Hunt LLP (Joint Broker)                  [phone] 
 Matthew Armitt 
 Ross Allister 
 Chris Burrows 
 
 WH Ireland Limited (Nominated 
  Adviser)                                     [phone] 
 Paul Shackleton 
 Nick Prowting 
 Jay Ashfield 
 
 Buchanan                                      [phone] 
 Bobby Morse, Senior Partner                [e-mail] 
 Anna Michniewicz, Account Director 
 

About Berkeley Energia:

Berkeley Energia's objective is to be one of the world's lowest cost producers reliably supplying the world's leading utilities with fuel for base load clean energy from the heart of the European Union. Once in production the mine will be one of the world's biggest producers supplying over four million pounds of uranium concentrate a year, equivalent to approximately 10% of the continent's total requirement.

An independent study published in July 2016 by MDM Engineering (part of AMEC Foster Wheeler Group) reported that the project has an NPV of over US$530 million and will produce 4.4 million pounds of uranium per annum at a cash costs of US$15.39 per pound, making it one of the world's lowest cost and a top ten global producer of uranium.

The mine will rejuvenate a community suffering from lack of investment and badly hit by long-term and high youth unemployment. Last year over 25,000 people left the Castilla y Leon region and in many villages houses stand empty.

Skills training programmes commenced last year and will continue throughout the construction phase to equip locals for the 454 jobs the mine will create once in full production. In addition, it has been estimated that over time the mine will indirectly generate an estimated further 2,295 jobs in the region. Local businesses are being prioritized and the local municipalities and communities will be fully supported throughout the life of the mine.

Spain currently is currently generating around 20% of its electricity from seven nuclear power plants and is aiming to meet its long term carbon reduction targets with a combination of a nuclear zero carbon base load and renewables.

Competent Persons Statement

The information in this announcement that relates to the Definitive Feasibility Study, Mineral Resources for Zona 7, Ore Reserve Estimates, Mining, Uranium Preparation, Infrastructure, Production Targets and Cost Estimation is extracted from the announcement entitled 'Study confirms the Salamanca project as one of the world's lowest cost uranium producers' dated 14 July 2016, which is available to view on Berkeley's Energia Limited (Berkeley) website at www.berkeleyenergia.com.

Berkeley confirms that: a) it is not aware of any new information or data that materially affects the information included in the original announcement; b) all material assumptions and technical parameters underpinning the Mineral Resources, Ore Reserve Estimate, Production Target, and related forecast financial information derived from the Production Target included in the original announcement continue to apply and have not materially changed; and c) the form and context in which the relevant Competent Persons' findings are presented in this announcement have not been materially modified from the original announcements.

The information in the original announcement that relates to the Definitive Feasibility Study is based on, and fairly represents, information compiled or reviewed by Mr. Mr Jeffrey Peter Stevens, a Competent Person who is a Member of The Southern African Institute of Mining & Metallurgy, a 'Recognised Professional Organisation' (RPO) included in a list posted on the ASX website from time to time. Mr. Stevens is employed by MDM Engineering (part of the Amec Foster Wheeler Group). Mr. Stevens has sufficient experience that is relevant to the style of mineralization and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'.

The information in the original announcement that relates to the Ore Reserve Estimates, Mining, Uranium Preparation, Infrastructure, Production Targets and Cost Estimation is based on, and fairly represents, information compiled or reviewed by Mr. Andrew David Pooley, a Competent Person who is a Member of The Southern African Institute of Mining and Metallurgy', a Recognised Professional Organisation' (RPO) included in a list posted on the ASX website from time to time. Mr. Pooley is employed by Bara Consulting (Pty) Ltd. Mr. Pooley has sufficient experience that is relevant to the style of mineralization and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'.

This information is provided by RNS

The company news service from the London Stock Exchange

END

MSCBRGDSSXDBGRX

(END) Dow Jones Newswires

April 24, 2017 02:00 ET (06:00 GMT)