|What we own||The Group has a 1% life of mine NSR royalty on the Salamanca uranium project located in Spain and operated by ASX-listed Berkeley Energia Limited (‘Berkeley’). The project consists of four main deposits (Retortillo, Alameda, Zona 7 and Gambuta) and is located in Salamanca Province, Spain, approximately 250km west of Madrid.|
|Performance||On July 20, 2015, Berkeley announced that the Nuclear Safety Council had issued a favourable report for the grant of the Initial Authorisation of the proposed process plant to be built on Retortillo, as a radioactive facility, the first in a 3-step process required to authorise the plant for operation.
On October 21, 2015, Berkeley announced the receipt of all the European Union, National, Regional and Provincial level approvals required for the initial infrastructure development of the Salamanca project. These represent major milestones in advancing the project towards first production, with the Environmental License and Mining License already granted at the Retortillo deposit.
On October 7, 2015, Berkeley announced that following an infill drill program at Zona 7, the mineral resource estimate for Zona 7 was updated for an increase in resource grade, an increase in resource pounds and the upgrade of almost 90% of the Inferred Resource to the Indicated category.
On November 4, 2015, Berkeley announced an updated pre-feasibility study (‘PFS’) on the Salamanca project that now includes the updated Zona 7 deposit. Its inclusion in the updates PFS has increased the mine life from 11 to 18 years and reduced operating costs from US$24.60 to US$15.60 per pound of uranium produced during steady state operations, which should make it amongst the lowest cost producers in the world, once developed.
During 2016, Berkeley expects to conduct additional exploration drilling at Salamanca to test a number of drill targets located within the 100km of the approved processing facility and where historical drilling has intersected high grades of uranium without being fully advanced.
|Valuation||The Salamanca royalty is classified as a royalty intangible asset on the balance sheet. As such, this asset is carried at cost less amortisation and impairments. Royalty intangible assets are amortised when commercial production commences, on a straight line basis over the expected life of the mine.|