28th Nov 2016 09:59
LONDON (Alliance News) - Berkeley Energia Ltd on Monday said it has signed an off-take agreement with Interalloys Trading Ltd for the sale of the first production from Berkeley's Salamanca uranium mine in Spain.
The two parties have converted the letter of intent into a binding agreement, which includes a doubling of annual contracted volume to a total of two million pounds of uranium over a five-year period. Potential exists to increase annual volume further as well as extend the contract to a total of three million pounds, Berkeley said.
An average fixed price of USD43.78 per pound of contracted and optional volume has been agreed, compared with the current spot price of around USD18 per pound. Berkeley said this would give it a very strong margin above its state cash cost of around USD15 per pound.
Berkeley added that it is in discussions with other potential off-takers in relation to similar contracts.
"With initial construction well underway and as we move closer to production we are receiving growing interest from major utilities who are looking to diversify their off-take from a low cost producer in Europe. We intend to build our uranium sales book by entering into long-term off-take contracts from now until the commencement of production," Managing Director Paul Atherley said in a statement.
Shares in Berkeley Energia were trading up 5.5% at 46.70 pence on Monday.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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