Berkeley Energia Backed by Major Shareholder
The company aims to utilise the US$10 million worth funds procured towards the advancement of major initial infrastructure work and exploration programs.
Berkeley Energia Limited (ASX:BKY) announced that major shareholder Resource Capital Funds (RCF) increased its stake by purchasing US$5 million worth shares in the company at a 15% premium to the 30-day volume weighted average price (VWAP). Berkeley is also set to receive an additional US$5 million from RCF through a royalty refinancing.
Berkeley Aims to Utilise the Funds for Initial Infrastructure Work
Berkeley issued US$5 million worth of ordinary shares at 32 pence per share, representing a 9% premium to the 10-day volume weighted average price (VWAP) and a 15% premium to the 30-day VWAP. RCF has also agreed to pay another US$5 million for a 0.375% fully secured net smelter royalty over the project. Berkeley states that these transactions underline the robust economics of the Salamanca project despite the current low uranium prices. The company aims to utilise the US$10 million worth funds procured towards the advancement of major initial infrastructure work and exploration programs.
Berkeley anticipates the main development financing to take place during the second half of 2016.
Mr. Paul Atherley commented on the financing: “The funding allows us to undertake the initial infrastructure development ahead of the commencement of main construction and financing in the year. In addition it will allow us to target a number of the high value exploration targets looking for additional Zona 7 style deposits over the next few months.”
Mr. Atherley further added that the company is currently performing the definitive feasibility study, which is expected to be published within the next few months.
This financing agreement has been reached after several months of due diligence by RCF and its advisors across several aspects of the quality of the Salamanca project. RCF currently holds 7.2% of the issued capital.
Berkeley Completed the Feasibility Studies at the Salamanca Project
Recently, Berkeley released a quarterly report, announcing that its flagship project, the Salamanca venture has advanced into the development stage.
BKY has risen 0.9% since the announcement and was last traded at $0.58, as at 10:25 am (AEST).
Author: Kaivalya Kandarpa
May 10, 2016
Kaivalya is an equity analyst and a client advisor at Wise-owl. She specialises in fundamental and technical analysis for large and mid-cap companies. Having completed her bachelor's degree in Business Administration majoring in Finance, Kaivalya has a comprehensive understanding of international stock market movements. She tracks local and overseas markets and compiles analytical reports for various industries.