Anglo Pacific "positive" about feasibility study for Salamanca mining project

Natural resource company Anglo Pacific was "positive" about the definitive feasibility study (DFS) from Berkeley Energia on its mining project in Salamanca, Spain.

The Salamanca mining project is located in a historic uranium mining area in western Spain.

The DFS reported that the mine is capable of producing an average saleable production of 4.4m pounds of uranium per annum over 10 years of steady state production, or an average of 3.5 million pounds of uranium per year over a 14-year mine life.

The company said that this was “significantly higher” than the rate of production it assumed when the company bought the royalty in 2009, due to the increase in resource found in the past 12 months by Berkeley Energia.

First production of royalty income for the company is expected in 2018.

In December 2009, Anglo Pacific acquired a 1% net smelter return (NSR) royalty for production from Berkeley Energia's Spanish and Portuguese assets for A$4.1m. Anglo Pacific also holds 30.3m Berkeley Energia ordinary shares.

"We are encouraged by the timely release of this positive DFS," chief executive Julian Treger said.

“Based on Berkeley's long-term contracted uranium price assumptions, the project should generate average gross annual sales revenue of approximately $180m. Anglo Pacific has a 1% NSR royalty based on the revenues received by Berkeley. We look forward to Berkeley's progress in bringing this exciting project into production."

The company said its aim is to develop a diverse international royalty company with a portfolio centred on base metals and bulk materials, which focus on accelerating income growth through acquiring royalties on projects that are cash flow generating or are expected to be within the next 24 months.

It also said its policy is to pay a substantial portion of these royalties to shareholders as dividends.

Shares in Anglo Pacific were up 4.41% to 88.75p at 1647 BST.