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PERTH (miningweekly.com) – Uranium developer Berkeley Energia has signed a letter of intent for the sale of its first million pounds of uranium from the Salamanca mine, in Spain.
The agreement, with Interalloys Trading, will span a period of five years starting from first production. The average price contemplated by the parties is above $41/lb, which compares well with the current spot price of $25/lb, Berkeley reported on Tuesday.
“We are delighted to have signed an agreement over our first million pounds of offtake and contemplated pricing above $41/lb, which would give us a very strong margin above our steady state cash cost of around $15/lb,” said MD Paul Atherley.
“With initial construction well under way and as we move closer to production, we are receiving growing interest from major utilities who are looking to diversify their offtake to a low-cost producer in Europe.”
Atherley added that the company intended to build its uranium sales book by entering into long-term offtake contracts between now and the start of production.
The Salamanca project is expected to deliver about 4.3-million pounds a year of uranium oxide over a mine life of 18 years. All major approvals for the development of the project are already in place. Project development was started in March this year.