Oman fund to invest $120mn in Berkeley Energia

Berkeley Energia Limited (a UK-based clean energy firm) has entered into an investment agreement with the sovereign wealth fund (SWF) of the Sultanate, agreeing to invest up to $120 million to fully fund the Salamanca mine into production.

The investment will position the fund as a long-term strategic investor in the company, as well as a potential offtake partner, and is structured as an interest-free and unsecured convertible loan of $65 million, which can be converted into ordinary shares at 50 pence per share resulting in the fund owning approximately 28 per cent of the company, said a company release.

The three tranches of options convertible at a weighted average price of 85 pence per share will contribute a further $55 million towards the later phases of the company’s development of the Salamanca mine, resulting in the fund holding a further 9 per cent of the company.

The investment is binding for the parties and is subject to approval by the company’s shareholders. The fund will also have the right to appoint a non-executive director to the board and the right to match future uranium off-take transactions on similar commercial terms, subject to certain limitations on volume.

“We are delighted to welcome Oman’s sovereign wealth fund as a long-term strategic investor in the company and look forward to working closely with them to realise the full potential of the exciting Salamanca project,” said Paul Atherley, managing director of Berkeley Energia.

The Salamanca mine is one of the only major uranium mines in development in the world today at a time when spot uranium prices are at a decade low.

“The project benefits from a rare combination of low up front capital cost and very low operating costs and due in part to its location in the heart of the European Union, we are able to contract supply at prices well above the current spot price. The fund’s interest in matching our future off-take contracts will further enhance our revenue stream.”

“The Salamanca mine matches our investment criteria of being a long life, low-cost mine development opportunity with outstanding economic fundamentals. We are excited to partner with the Berkeley Energia team to unlock the full potential of the Salamanca project,” said Tim Keating, private equity manager for Mining and Resources, State General Reserve Fund. Canaccord Genuity London acted as corporate finance advisor in the transaction.

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