Oman to invest in Berkeley Energia's Salamanca mine

Oman's sovereign wealth fund has agreed to invest up to $120m to fully fund Berkeley Energia's Salamanca uranium mine into production.

The investment, which will position the fund as a long-term strategic investor in the company, will involve an interest-free and unsecured convertible loan of $65m. The loan can be converted into ordinary shares at 50p per share, resulting in the fund owning around 28% of the group.

There will be three tranches of options convertible at a weighted average price of 85p per share, contributing a further $55m towards the later phases of the company's development of the Salamanca mine, resulting in the fund holding a further 9% interest.

The fund will have the right to appoint a non-executive director to the board and to match future uranium off-take transactions on similar commercial terms subject to certain limitations on volume.

Managing director Paul Atherley said: "We are delighted to welcome Oman's sovereign wealth fund as a long-term strategic investor in the company and look forward to working closely with them to realise the full potential of the exciting Salamanca project.

"The Salamanca mine is one of the only major uranium mines in development in the world today at a time when spot uranium prices are at a decade low. The project benefits from a rare combination of low up front capital cost and very low operating costs and due in part to its location in the heart of the European Union we are able to contract supply at prices well above the current spot price."

He added that the fund's interest in matching Berkeley's future off-take contracts will further enhance its revenue stream.

At 0945 BST, the shares were up 8.5% to 49.10p.