REG - Berkeley Energia - Salamanca Capital costs reduced by 1% to EUR 82.3M <Origin Href="QuoteRef">BKY.AX</Origin>

Berkeley EnergiaAnnouncement

06/07/2017 07:05

RNS Number : 2589K
Berkeley Energia Limited
06 July 2017
BERKELEY ENERGIA LIMITED
NEWS RELEASE | 6 July 2017 | AIM/ASX: BKY
Capital costs for Salamanca reduced by 1% to 82.3million
The capital cost for the construction of Berkeley Energia's ("Berkeley" or "the Company") Salamanca mine has reduced to 82.3million (US$93.8million), a 1% reduction over previous estimates, confirming the project's status as one of the lowest cost uranium mine developments in the world today.
The project benefits from well-established EU infrastructure and a highly competitive cost environment combined with short lead times for major equipment items.
The estimate for bringing the Retortillo deposit into production was prepared as part of the Front-End Engineering and Design ("FEED") by Amec Foster Wheeler Group, one of the world's largest engineering groups.
The FEED is the execution phase of the project during which the overall engineering and process design is translated into equipment procurement packages and awards to specialist sub-contractors. A number of Spain's most reputable engineering groups have provided their input into the Company's study work, including Madrid IBX-35 listed companies Ferrovial and OHL.
The final capital costs reflect all detailed design work carried out during the FEED, and resulted in an update to the nature and quantity of materials required to build the Salamanca mine, with costs from contractors and suppliers being amended based on final bidding packages. 
The FEED study reported that final up-front direct costs for the Salamanca mine are 74.7million (US$85.1million),1% below estimates from the Definitive Feasibility Study ("DFS") released in July 2016 (which used 1April2016 as the CAPEX estimating base date).
The main drivers of the optimisation were:
 An improved sequencing of the project
 An update to the design of the Leach Pad 
 Improved materials handling
 Optimised design of civils based on detailed ground conditions
 Extensive procurement exercise optimising the sourcing of materials and contractor/supplier negotiations
Breakdown of updated Retortillo capital costs
Description
Cost (million)
Mining 
4.2
Waste Dumps, Water Management, etc.
3.3
Process Plant
60.8
Other Capex
4.3
G&A
2.1
Total Direct Costs
74.7
Indirect Costs
7.6
TOTAL COSTS
82.3
The Company will continue to pursue cost optimisation opportunities as it commences full construction this summer, which includes the evaluation of the indirect costs.
Managing Director, Paul Atherley, commented:
"The FEED has confirmed Salamanca as one of the world's lowest cost uranium mines to develop.
"Since our successful fundraise late last year, the site has been prepared for full construction and we now have nearly 70 staff and contractors on site. The strong support from local communities is at the heart of the Salamanca mine. Berkeley is fully committed to further its recruitment drive and training programmes for the significant expansion of the business over the coming months as construction accelerates." 
For further information please contact:
Berkeley Energia Limited
+44 20 3903 1930
Paul Atherley, Managing Director
info@berkeleyenergia.com
Hugo Schumann, Chief Commercial Officer
Peel Hunt LLP (Joint Broker)
+44 20 7418 8900
Matthew Armitt
Ross Allister
Chris Burrows
WH Ireland Limited (Nominated Adviser)
+44 20 7220 1666
Paul Shackleton
Jay Ashfield
Buchanan
+44 207 466 5000
Bobby Morse, Senior Partner
BKY@buchanan.uk.com
Anna Michniewicz, Account Director
Competent Persons Statement
The information in this announcement that relates to the FEED costs is based on, and fairly represents, information compiled by Mr Francisco Bellon, a Competent Person who is a member of the Australasian Institute of Mining and Metallurgy. Mr Bellon is the Chief Operating Officer for Berkeley and a holder of shares, options and performance rights in Berkeley. Mr Bellon has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Bellon consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears.
Forward Looking Statements
Statements regarding plans with respect to Berkeley's mineral properties are forward-looking statements. There can be no assurance that Berkeley's plans for development of its mineral properties will proceed as currently expected. There can also be no assurance that Berkeley Energia will be able to confirm the presence of additional mineral deposits, that any mineralisation will prove to be economic or that a mine will successfully be developed on any of Berkeley mineral properties. These forward-looking statements are based on Berkeley's expectations and beliefs concerning future events. Forward looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of Berkeley, which could cause actual results to differ materially from such statements. Berkeley makes no undertaking to subsequently update or revise the forward-looking statements made in this announcement, to reflect the circumstances or events after the date of that announcement.

This information is provided by RNS
The company news service from the London Stock Exchange
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