Take the nuclear option with Berkeley

Manageable capital and operating costs? Possibly the lowest anywhere, and profitable even at today's historically weak uranium prices. A stable permitting regime? Yes, with huge local and national backing further cemented by the European Union's desire for secure, homegrown sources of nuclear material. Capital market support for the miner's funding needs? Affirmative, if November's oversubscribed $30m (£23.9m) placing at 45p a share is any indication.

Mining projects, because they rely on the favourable timing of several controllable and uncontrollable factors, often involve promises that may not be realised. So like any Aim-listed resources group yet to begin production, Berkeley Energia faces risks.

At present, the biggest variable is funding, around $100m of which is needed to complete the mine and support working capital. According to both the company and analysts, this is likely to involve either a debt provider or strategic partner buying into Berkeley's wholly owned project. Based on recent M&A activity, broker WH Ireland believes that, even with uranium prices at current depressed levels, a 25 per cent stake could fetch $60m, putting a value of 60p a share on Berkeley's retained interest. Investors should have little doubt that Berkeley is on the radar of big fish in the natural resources world. Buyers of shares from the placing included fund giants BlackRock and Fidelity, while FTSE 250 engineering company Amec Foster Wheeler's (AMFW) role in the front-end design of Salamanca only serves to underline the project's credentials.

A few numbers justify that interest. The first is $17.30, the initial operating cost to mine a pound of triuranium octoxide (U3O8), the yellowcake compound preferred by reactor operators. That's less than half the average fixed price recently agreed in a five-year offtake deal with Interalloys, and an even lower fraction once the uranium market rebalances and prices head back towards levels that will encourage future production. And there are good reasons to believe this will spike at some point in the next few years; in a nutshell: between now and 2020, dwindling stockpiles and growing Chinese and Indian reliance on nuclear power generation are projected to lead to a 40 per cent increase in demand. Consequently, one could easily argue that this year's average spot price of $25/lb might mark the bottom of the long drop in uranium prices sparked by 2011's post-Fukushima panic.