Spain-focused uranium miner Berkeley Resources has signed a non-binding US$70 million Memorandum of Understanding with Korea Electrical Power Corporation for its Salamanca Uranium Project.
Spain-focused uranium miner Berkeley Resources has signed a non-binding US$70 million Memorandum of Understanding with Korea Electrical Power Corporation for its Salamanca Uranium Project.
Korea Electrical Power Corporation (KEPCO) will take a 35 per cent interest in Berkeley's Salamanca Uranium Project.
KEPCO will also contribute 35 per cent of the funding for the development of the Salamanca Uranium Project assets to bring them into production.
KEPCO is a Korean government invested diversified company involved in the generation, transmission and distribution of electrical power from nuclear, hydro, coal, oil and LNG sources worldwide.
"The strategic partnership with such a successful industry heavyweight as KEPCO confirms our determination to rapidly develop our Salamanca Uranium Project and be operational by the end of 2012," said Berkeley managing director Ian Stalker.
"We are delighted to have this added flexibility in both our financing plan and market awareness, particularly at this stage of our project development."
See full company statement below:
Berkeley Resources Limited (ASX/AIM:BKY) is pleased to announce that it has entered into a non-binding Memorandum of Understanding (MOU) with the Korea Electric Power Corporation (`KEPCO'), to finance and develop the Salamanca Uranium Project.
The Korea Electric Power Corporation is a Korean government invested diversified energy company with assets over $US 80 billion and revenues of over $US 30 billion, on a consolidated basis as of December 31, 2009. The company is involved in the generation, transmission and distribution of electrical power from nuclear, hydro, coal, oil and LNG sources worldwide.
KEPCO provides electricity to almost all households in Korea and operates twenty nuclear power plants in the country with six more under construction.
The company has over 30,000 employees and is listed on the Korean Stock Exchange and the New York Stock Exchange.
KEPCO will invest, at the Project level only, US$ 70 million for a 35% interest in Berkeley's Salamanca Uranium Project, which comprises of Aguila, Alameda, Retortillo and Villar mining areas. KEPCO will also contribute funding of 35% for the development of the Salamanca Uranium Project assets to bring them into production as well as ongoing operating expenditure.
Berkeley and KEPCO will work together through appropriate Board representation at project level and will regularly review future Capital needs and off-take arrangements as the project development phase progresses.
In return, this agreement provides that KEPCO will execute a proposed offtake agreement to purchase 35% of the Salamanca Uranium Project's U308 production at industry standard terms, based on a mix of spot and term prices.
Mr. Ian Stalker, Managing Director of Berkeley commented: 'The strategic partnership with such a successful industry heavyweight as KEPCO confirms our determination to rapidly develop our Salamanca Uranium Project and be operational by the end of 2012. We are delighted to have this added flexibility in both our financing plan and market awareness, particularly at this stage of our project development. This marks a significant achievement in the progress of Berkeley's development cycle and goes a long way to achieve the development of this unique and strategic Project. Berkeley will also retain 100% of the exploration potential in its extensive portfolio as well as the Gambuta Project, which has a JORC inferred resource of 9.2 Mlbs.'
The transaction is subject to the completion of a final sixty (60) days due diligence by KEPCO, execution and delivery of a Definitive Agreement (DA) within thirty (30) days thereafter and Berkeley and KEPCO Board approvals, as well as the receipt of certain regulatory stock exchange approvals, if required.
