Kepco partners to develop Spanish uranium
10 August 2010
Korea Electric Power Corporation (Kepco) has agreed to invest $70 million in Berkeley Resources Ltd's Salamanca uranium project in Spain in return for an offtake agreement entitling it to 35% of the project's output.
Spain-based Berkeley said it has signed a non-binding memorandum of understanding (MoU) with the Korean government energy company, which will see Kepco take a 35% interest in Salamanca. Kepco's interest will be at the project level only. Kepco will also contribute funding of 35% for the development of the Salamanca project's assets to bring them into production as well as ongoing operating expenditure. In return, Kepco will be able to secure 35% of the project's uranium output at standard terms based on a mixture of spot and long-term uranium prices.
Berkeley is aiming to start production at Salamanca, which comprises the four mining areas of Aguila, Alameda, Retortillo and Villar, by the end of 2012. The Salamanca uranium project includes Spanish state-owned reserves, in which Berkeley has a right to acquire a 90% interest, as well the company's own wholly-owned permits. Uranium was discovered in Salamanca during the 1950s, and from 1974 to 2000 Enusa's Fe mine produced over 4000 tonnes of uranium (tU) before closing due to low uranium prices. Berkeley intends to use the existing 800 tU per year Quercus mill (Saelices el Chico), which has been under care and maintenance since 2003, to process uranium from Salamanca.
Bob Hawley, non-executive chairman of Berkeley Resources, told World Nuclear News: "This investment in many ways confirms the reality of our Spanish Uranium project, and adds to our confidence in building our company for the future."
Berkeley's managing director, Ian Stalker, described the strategic partnership with Kepco as a significant achievement in the progress of the company's development cycle. Berkeley would also retain 100% of the exploration potential in its "extensive" portfolio as well as the Gambuta Project with JORC-compliant inferred resources of 9.2 million pounds U3O8 (3539 tU), he said.
South Korea's 20 nuclear power units provide almost 40% of its electricity, but rely on imported uranium to fuel them. Earlier in 2010 Kepco signed an agreed to take an indirect 10% stake in the operating company for Niger's Imouararen uranium mine, Imouraren SA, in return for rights to 10% of the mine's production. Various Korean nuclear companies are involved with uranium exploration in Canada, while the state-owned Korea Resources Corporation (Kores) has declared an intention to invest heavily in uranium and copper mines in Africa and South America.
The transaction between Berkeley and Kepco is subject to a due diligence process as well as the necessary approvals from both companies' boards and the receipt of any necessary regulatory stock exchange approvals.
Researched and written
by World Nuclear News