Berkeley Energia says it’s still waiting on endorsement for uranium mine following media speculation

Berkeley Energia ASX BKY endorsement uranium mine Salamanca Spain media speculation
Berkeley Energia is still waiting on the necessary approvals required to bring its uranium mine in Spain into production.

Aspiring uranium miner Berkeley Energia (ASX: BKY) has again been thrust into the spotlight after circulating media reports alleged Spain’s nuclear watchdog had backed studies for the construction of its proposed $100 million uranium mine.

The mine, located in western Spain, is currently in the critical planning stages of development. Any successful development of the mine is contingent on the receipt of permits and licences, particularly the award of the Urbanism Licence and Construction Authorisation.

Earlier this week, Berkeley was hit with a speeding ticket from the ASX after the company’s shares spiked more than $0.06 within a few days on heavy volume.

While the company said it was unaware of any information that could have caused the recent unusual trading in its securities, Berkeley was forced to make another market announcement today acknowledging recent Spanish media reports regarding potential approvals for Salamanca.

“The company has received no official notice in this regard and will update shareholders if and when any formal notice is received,” it told shareholders today.

The statement comes after a source reportedly told Reuters the Nuclear Safety Council had endorsed two studies for the Salamanca open-cut mine.

It’s understood the studies looked at the prevention of radiation effects on water and the general environment, among other safety concerns.

Last October, Reuters had reported that the national government had intended to refuse the company the necessary permits, which again prompted Berkeley to make a clarifying announcement to shareholders.

During that time, the media reports corresponded to a decline in the company’s securities, with the share price falling more than 50% between September and October 2018.

A large amount of interest surrounds the company’s Salamanca project, given it has the potential to be Europe’s only major uranium mine.

An overview of Salamanca

The company has previously indicated intentions to begin Salamanca’s commissioning phase in late 2019, but cautioned this step would be subject to the award of the Urbanism licence and other relevant approvals.

To-date, Berkeley has received more than 120 favourable reports and permits for the development of the proposed operation and has already received a mining and environmental licence.

A 2016 definitive feasibility study indicated the project can produce an average of 4.4 million pounds of uranium per year at a cash cost of US$13.30 per pound over an initial 10-year mine life.

The company already has 2.75Mlb of uranium oxide under contract for the first six years of operation, with a further 1.25Mlb of optional volume at an average price above US$42/lb compared with a spot price of $22/lb.

Uranium fundamentals positive

Berkeley expects the Salamanca mine to reach production as the market enters a supply/demand deficit.

A purported rise in demand is set to correspond with further production cuts. As Small Cap’s in-depth uranium guide indicated, uranium is recognised as the clean, reliable, renewable and preferred option over fossil fuels such as coal.

The market for uranium is currently centred around enriched fuel for power generation. There are currently 59 reactors under construction globally, representing a 25 year high in nuclear growth.

With uranium demand predicted to rise in several countries, Berkeley isn’t the only firm seeking to capitalise on uranium’s comeback. There is a slew of ASX-listed companies focused on uranium assets, including Adavale Resources (ASX: ADD), Alligator Energy (ASX: AGE) and BHP Group (ASX: BHP).

Berkeley shares had skyrocketed to hit $0.46 in morning trade, settling in to be up 51% in late morning trade at $0.37, up 60% for the week.

Lauren has more than seven years’ experience as a business journalist and editor in Australia and Southeast Asia. With specialist knowledge of the resources sector, including oil and gas, she has covered publicly listed companies of all sizes. Lauren has reported across a range of industries including mining and property.