Berkeley Stock Quakes on Salamanca Uranium Uncertainty

Berkeley Energia (ASX:BKY,LSE:BKY) took a hit this week due to media reports alleging it has been denied a necessary permit for its Salamanca uranium mine by the Spanish government.

In a quarterly report released by Berkeley on Monday (October 15), the company explained that it is waiting on two major approvals before moving forward with Salamanca, with one being an urbanism license and the other being construction authorization.

While the report says the company has complied with all legal requirements, a Reuters article released Wednesday (October 17) says that a confidential report indicates that Spanish authorities have declined to grant a building permit to Berkeley.

The rejection allegedly comes on the basis that Berkeley does not own all the land necessary to the project. The project also reportedly lacks key technical information and still has to be authorized by Spain’s central government.

Berkeley’s share price saw a harsh reaction to the news on Wednesday, plummeting almost 30 percent to AU$0.33 by the end of trading on the ASX. The company then opted to halt trading on the ASX due to the media reports, and said the freeze will remain until an announcement is released regarding the situation or on October 19, whichever is first.

The company also issued a subsequent statement that day in response to the reports, noting that Spain’s Nuclear Safety Council and Energy and Environment Ministry have both declined to comment.

The statement also says that Berkeley has not received any kind of official notice regarding the permit denial, and has contacted the aforementioned council and ministry for clarification on the matter.

Salamanca is intended to be one of the world’s lowest-cost producers of uranium, and is located three hours west of Madrid in Spain. The project’s definitive feasibility study indicates Salamanca is capable of producing an average 4.4 million pounds of uranium per year over an initial 10-year period.

Development on the project started in August 2016, at which point initial infrastructure work on site began. Salamanca is Berkeley’s only asset.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.