Berkeley hits permitting roadblock in Spain

The bad news is Ian Middlemas-chaired Berkeley Energy may have dusted more than a decade and untold millions trying to develop the Salamanca uranium project in Spain. The positive news is Berkeley is estimated to have more than A$75 million cash to go looking for a new project if indeed it comes to pass that the venture in Spain has been in vain.

Berkeley today reported authorities have evidently knocked back a permit to build a uranium plant at Salamanca.

Berkeley said it was “extremely disappointed” with the news and would strongly defend its position, with a “range of legal options” to be considered.

Investor confidence in the venture collapsed on the news, with the ASX company’s enterprise value reducing to less than $20 million.

Salamanca has shaped as a highly profitable development because of its size, grade and other characteristics, with shareholders’ cruelly crushed hopes being compounded given the recently thawing investor sentiment towards the uranium sector.

Middlemas, who has been at the company since 2012, is believed to hold about 3.6% of Berkeley.

However, as well as having plenty of cash, the other positive news for shareholders is Middlemas’ track record and connections in the resources sector, offering hope that if Salamanca can’t be salvaged, a quality new opportunity could yet emerge.

Shares in Berkeley were down 41% to 37c in morning trade, capitalising the company at $95 million.

Berkeley started the recently completed June quarter with $80 million cash.

Source: Mining Journey

Highfield Resources’ mining concession process at Muga Potash Project in Spain

Engineering and construction update

Highfield Resources’ flagship Muga Project is targeting relatively shallow sylvinite beds, across around 60 square kilometres in the Provinces of Navarra and Aragón. Mining is planned to commence at a depth of about 350 metres from surface and is therefore ideal for a relatively low-cost conventional mine. During the quarter, Highfield prepared a HAZOP (hazard and operability analysis) report which covers the operational risk assessment and performance stress tests of the final designs.

Highfield plans to finalise these analyses while the project is pending the grant of the Mining Concession.

As soon as the concession is granted, the company plans to share the information with its construction partner, Acciona, and progress with the negotiation of the construction agreement and the project implementation.

Highfield Resources is making progress in finalising the review of restoration and remediation plans at its Muga Potash Project in Spain and “looks forward to a swift conclusion of the Mining Concession process”, according to CEO Ignacio Salazar.

Since the end of the March quarter, the thorough review by various government entities has progressed satisfactorily for the Muga project.

The Ebro Water Agency and the two environmental departments of Madrid and Navarra have submitted positive reports to the Mining Authorities. An emergency plan for Muga has also been approved by the Navarra Emergency Services Department. Highfield is now awaiting the environmental department of Aragón to finalise its report, which the company understands is close to completion.

Clear path forward

Chief executive officer Ignacio Salazar said: “The final fifth section of the mining concession review has needed extra effort as it required several other government entities to be consulted on the restoration, emergency and water plans.

“Credit to the team and the administrations that, despite the number of parties involved, this part of the process is close to being resolved.

“We very much appreciate the recent public shows of support for the Muga Project by the President of Navarra in a recent meeting with Highfield management and in her recent visit to the mine area.

“We also very much welcomed the publication by the Government of Navarra of the Social Baseline Study.

“With the path to finalise the review of the restoration and remediation plans clear, we look forward to a swift conclusion of the Mining Concession process for the Muga Project.”

Next steps

Additionally, the company has been advised that the mining authorities have finalised their review of those queries raised during the public exposition carried out in August 2020. The public exposition related exclusively to the restoration plan that is also part of the scope of section 5. No material issues have been raised by the Mining Authorities as a result of these reviews.

Highfield has been advised that once the report from the environmental department of Aragón is received and if no further clarification is required by the Authorities, the next step is to send the text of the mining concession document to the Central Government’s lawyers for its final legal review prior to the mining concession award being issued.

Sales and marketing update

Highfield has already signed non-binding MOUs representing more than its full phase-1 production capacity for potash and salt. During the quarter, the company continued to engage with traders, potential offtake partners and logistics partners which are interested in a more strategic participation in the project.

Muga Project financing

As part of its debt financing strategy, Highfield continued to work closely with Endeavour Financial to identify potential lenders, as well as preparing for the engagement with lenders and the due diligence that will take place following award of the Mining Concession. The company also continues to engage with key brokers and strategic partners as it prepares to secure the equity portion of the financing at some stage after the receipt of the mining concession.

Source: proactiveinvestors.com.au

 

Portugal and Spain mining sector’s growth

Spain and Portugal show stable mining sector growth rates this year, despite the pressure from environmentalists.

Regarding Spain, current pressure on local miners is strong as the socialist government of Pedro Sánchez has committed to achieving carbon neutrality by 2050. This means that by that date Spain will only be able to emit as much CO2 as its carbon sinks are capable of absorbing. That also means that the country will be forced to close some of its mines, the development of which has been associated with harm to the environment as well as stopping production of radioactive minerals that may also include Rare Earth Elements. In recent years, Spain has also been reducing the volume of domestic coal mining and there is a possibility the same situation may develop with uranium. At the start of this year, the Spanish government announced plans to ban mining uranium and other radioactive minerals in a move that it says is in line with the EU energy policy.

According to some leading Spanish mining analysts, the ban may also affect rare earths projects as some of REE minerals could have small – but not harmful – radiation.

Implementation of these plans is part of the bill to reach a carbon neutral economy by 2050 which has focused on fossil fuels, hydrocarbons, and fracking and was approved by the Spanish government in May 2020. A series of amendments were also proposed that may fully ban exploration and mining of radioactive minerals. These plans, however, have already sparked serious concerns from miners and analysts who have fears for the future of domestic mining. As Spain has a wide range of mineral resources, its mining industry has a strategic importance for the economy. The introduction of restrictions, according to local experts, may lead to serious losses to the country’s budget plans. Currently, Spain is the second largest copper producer and the first producer of gypsum in the EU. In recent years, the annual mining output of the country has ranged between €3.28 billion – €3.5 billion; however, the current policy of the government may lead to a significant decline in these figures. Meanwhile, metallic minerals such as copper, zinc, nickel, gold and wolfram (tungsten) continue to be mined.

The situation in neigbouring Portugal is better despite COVID-19 (the country has one of the highest mortality rates in Europe). The government has no plans to introduce any restrictions on mining activities in the country and is planning to pay attention to development of its rich lithium reserves.

At present, lithium reserves of the country are estimated at 60,000 tonnes. In addition, Portugal has large areas containing the hard rock lithium mineral spodumene that are unexplored. Currently, the country remains the Europe’s largest producer of the metal with the annual output 1,200 tonnes. It accounts for about 11% of the global market; however, its output is entirely used to make ceramics and glassware. Therefore, the EU’s lithium needs have been met by imports from Chile, Australia, and China.

The development of the country’s lithium reserves will be carried out within the existing state strategy for developing its mineral resources. The strategy also involves rehabilitation of abandoned mining areas and attracting private investors. So far, some progress has been achieved which is reflected by some major investors participating in the local market. One of them is Savannah Resources Plc, a multi-commodity mineral resource development company, which  plans further development of the Mina do Barroso lithium project in northern Portugal with its local partner  Galp Energia. The project is set to become Europe’s first significant producer of lithium from spodumene. The project holds a resource estimate of 20 million tonnes of lithium with over 200,000 tonnes contained Li2O. Most of the future output will be supplied for the electric vehicle (EV) battery industry. The only problem for Savannah may be that, according to experts, it is 2.5 times more expensive to produce lithium extracted from Portugal’s spodumene-bearing granite rocks than from the brine fields of Chile. The South American nation hosts some of the largest known reserves. Portugal covers 50% of the Iberian Pyrite Belt, considered to be the EU’s most important metallogenic region. At present, the country is among the EU’s major producers of copper, tin, lithium and tungsten, while its largest fields include Neves-Corvo, Panasqueira, Aljustrel and others.

Source: resourceworld.com

 

W Resources’ plant improvement at Spanish project

At tungsten, tin and gold miner W Resources’ La Parrilla project, in Spain, plant improvements should be completed early next month. The company intends to operate its La Parrilla mine on a true 24/7 basis.

During the quarter ended December 31, the plant continued to work a four-day week. Operations moved to a five-day working week earlier this month and the plan is to move to a seven-day working week by April. Meanwhile, during the fourth quarter, a total of 261 841 t of run-of-mine ore was fed to the La Parrilla plant, up 53% on a like-for-like basis and up 15% on a pro rata basis compared with the quarter before.

Total tungsten and tin concentrate production reached 133.4 t for the quarter, up 72% on a like-for-like basis and up 29% on a pro rata basis compared with the third quarter. Tungsten concentrate production was 100 t during the quarter, up 83% on a like-for-like basis and up 37% on a pro rata basis compared with the quarter before; while tin concentrate production of 33.4 dry metric tonnes was up 46% on a like-for-like basis and up 9% on a pro rata basis compared with the third quarter.

Source: miningweekly.com