Berkeley Resources (ASX:BKY) has announced the results of the pre-feasibility study it ordered on the Salamanca uranium project in Spain. The study calls for an 11 year production scenario at an average of 2.7 million pound of uranium per year, including a steady-state production rate of 3.3 million pounds per year. The capex to reach this steady state production rate is estimated at $170M and a small part of this will be funded by the production in the first two years, as the $75M Alameda capex for the expansion to the steady state production rate will only be incurred in year two.
The average C1 production cost will be $24.6/lbs whereby Alameda will be able to produce at a lower cost than the Retortillo deposit. This excludes exploration costs, sustaining capex and G&A expenses on the corporate level.
Berkeley is advancing the Salamanca project but at a much slower rate it previously anticipated. We would like to wait until the company is fully permitted before taking a position. Berkeley received its environmental approval for the Retortillo deposit yesterday and is now waiting for the mining license.
Disclosure: The author holds no position in Berkeley Resources. Please see our disclaimer for current positions.