Berkeley to build $125m uranium mine

Uranium company Berkeley Resources, chaired by Perth dealmaker Ian Middlemas, plans to spend $125 million developing a mine in Spain, with the expectation that demand for yellowcake will ramp up by 2018 when the mine opens.

Berkeley released a definitive feasibility study on its Salamanca project, which estimated a capex of $US95.7 million ($A125 million), an initial mine life of 14 years and an average annual production of 4.4 million pounds of uranium at a cash cost of $US13.30 per pound.

The study also estimated an average annual net profit of $US116 million per annum for the first 10 years of production.

“The Salamanca project is capable of generating strong, sustainable cash flow through the low point in the uranium price cycle,” Berkeley managing director Paul Atherley said.

“We have commenced initial infrastructure works and are aiming to establish the operation as one of the world’s top 10 producers, reliably supplying long-term customers from the heart of the European Union.”

While uranium prices remain depressed, the company believes demand for yellowcake will increase in the US and China by the time the mine begins operating in 2018.

The project is expected to create 450 direct jobs, and 2,000 indirect jobs with the community in the region.

The DFS on Salamanca was managed by MDM Engineering, which is part of the Amec Foster Wheeler group.

Berkeley shares closed 6.9 per cent higher at 69 cents each.