Dual-listed Berkeley Resources (ASX:BKY,LSE:BKY) closed up 15 percent in Australian trade Monday following the release of high-grade drill results from its Zona 7 deposit, the largest of the satellite deposits of the larger Retortillo uranium deposit in Northern Spain. The drill campaign was designed largely as infill of the previously defined resource to move it upwards into the indicated category — a required stepping stone for ultimate conversion to a reserve and thus inclusion into mining and feasibility plans. Importantly, all of the intersections returned are not only shallow (the deepest starting at 47 meters) and therefore accessible by open-pit mining, but also thick and significantly higher in grade than the current resource for Zona 7. The results include:19 meters at 2,332 ppm U3O8
20 meters at 1,238 ppm U3O812 meters at 1,422 ppm U3O818 meters at 825 ppm U3O813 meters at 1,067 U3O8 Discovered in 2013, Zona 7 has an inferred resource of 3.9 million tonnes at 414 ppm U3O8 for a contained 3.6 million pounds; it makes up roughly 10 percent of the resource base that the company used to complete a prefeasibility study (PFS) in late 2012, but only 6 percent of the total resource base spread across Berkeley's entire Salamanca project area. The PFS envisages an 11-year project producing on average 2.7 million pounds per annum of U3O8. Mining is scheduled to commence at the Retortillo deposit, with a life of mine (LOM) cash cost of less than $30 per pound; it will later move on to the Alameda deposit, with lower cash costs toward $20 per pound. These forecast costs for Retortillo are based on an average mined grade of 306 ppm LOM, and therefore if much higher-grade material can be mined from Zona 7, these costs could be significantly lower — an important consideration in the early stages of the mine.
Berkeley is currently part way through a definitive feasibility study for the Salamanca project, and while it is likely that Zona 7 may positively impact early stage project economics, permitting remains the primary hurdle for the project. The permitting process for the project has been in train for over five years, and while the company has mapped out the process and the outstanding permits that need to be obtained before mining is approved, it has conspicuously not provided any guidance as to how long this process may take.Securities Disclosure: I, Brad George, hold no investment interest in any company mentioned in this article. Brad George is a geologist by trade, and has spent over 25 years working in the mining industry around the world in a variety of capacities. Primarily focused on exploration, Brad has gained extensive experience in iron ore, base metals and gold on five continents. He has extensive experience in the management of public resource companies. Upon completing an MBA, Brad spent several years in London as a partner in a boutique brokerage house, developing a franchise as a rated mining and metals analyst. Brad now resides in Perth, Western Australia. Berkeley Lifts Uranium Grade with Drilling from Uranium Investing News