Berkeley Energia BKY 1

Just a few months after Berkeley Energia (ASX:BKY, BKY.L) has released the results of an updated pre-feasibility study which includes the higher grade Zona 7 deposit to the overall mine plan, the company had more good news for its (prospective) shareholders. The resource estimate at the Retortillo zone has now also been recalculated, leading to a 15% increase in the average grade of the resource, which will very likely lead to even lower production costs at Retortillo. This new resource update will now be included in the optimization study that is currently taking place to try to finetune the economics of the Salamanca uranium project even further.

Despite the bad uranium market, Berkeley’s share price has now more than doubled since we first discussed the company in October 2013. That’s not very surprising as Berkeley’s most recent pre-feasibility study was nothing short but impressive as the shallow Zona 7 uranium mineralization has overhauled the economics of the project completely.

Berkeley Energia BKY 2

The mine life has increased from 11 years to 18 years whilst the operating cost per produced pound of uranium fell by 40%. The average production rate has increased to 4.3 million pounds of uranium per year in the mine’s steady state operation at a C2 cash cost of $18/lbs. As the initial capital is extremely low (less than $85M with an additional $54M needed for Zona 7 and $65M for Alameda), Berkeley’s Salamanca project actually is one of the very few uranium projects that actually have a chance to be financed and constructed.

Go to Berkeley’s website
The author holds a long position in Berkeley Energia. Please read the disclaimer

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