Berkeley Energia Ltd (LON:BKY) shares jumped on Wednesday as the group updated on its progress with the Salamanca uranium project and highlighted that the fundamentals for uranium mining remain "very strong".
In its latest quarterly report, the company said that spot uranium price continued to strengthen during the quarter, rising 4% to US$28.5 per pound by the end of the three months.
"The fundamentals for uranium remain very strong with continued supply disruption being met by a re-contracting cycle for US and EU utilities; and continued increases in global nuclear capacity," Berkeley said.
It noted that some 2.75mln pounds of uranium (U3O8) under contract for the first six years, with another 1.25mln pounds of optional volume, at an average price of US$42 per pound.
In the statement, Berkeley detailed progress with permitting for the mine. It said it has received a number of favourable assessments from various regulatory bodies regarding radiological and environmental surveillance plans for certain aspects of the project relating to water.
The company said it awaits the recommendation report from the Nuclear Safety Council to the relevant minister.
Additionally, noted that it has been informed that the local municipality remains unable to grant the Express Resolution on the award of the Urbanism Licence due to a number of outstanding items - it clarified that these issues have been disclosed previously and are being addressed by the company.
"The Salamanca mine is being developed to the highest international standards and the company's commitment to the environment remains a priority," Berkeley said.
"It holds certificates in Sustainable Mining and Environmental Excellence which were awarded by AENOR, an independent Spanish government agency. The company has been re-awarded both certificates following a consultation process with the agency."
Berkely also told investors that it continues to advance review of engineering designs for the project.
Exploration activities, meanwhile, continue. The company said that soil sampling close to the Salamanca mine site has identified other elements as well as uranium including gold, lithium, cobalt, tin and rare earths.
It has now applied for twelve new investigation permits, covering 350 square kilometres.
In a note to clients, analysts at Shore Capital noted: "In October 2018, Berkeley said that the timing of the award of the Urbanism Licence was "uncertain" but "unlikely to be received imminently". The company, therefore, commenced a cost-reduction programme, but remains in a relatively strong financial position with A$100m of cash as of end CY2018."
In late morning trading, shares in Berkeley Energia were 18.5% higher at 27.25p.
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