PERTH (miningweekly.com) – Uranium miner Peninsula Energy will suspend further development of its Karoo projects, in South Africa.

Peninsula in October last year announced plans to divest of its 74% interest in the Karoo projects, which consists of 40 prospecting rights over 7 800 km², hosting Joint Ore Reserves Committee-compliant resource of 56.9-million pounds of uranium oxide equivalent.

At the time, Peninsula said that the company would support its South African project partners to pursue permitting for the Karoo projects during the divestment process.

The ASX-listed company said on Monday that its decision to fully withdraw from any further development activities in the Karoo projects stemmed from numerous factors, including the prevailing uranium market conditions, which did not support the ongoing development of this hard rock uranium mining opportunity.

Secondly, the limited duration and cost structure associated with holding South African mineral retention rights quickly became cost prohibitive, which meant that placing the project on hold to retain some form of option value was not a viable scenario.

Peninsula said that these reasons had deterred a number of entities who had expressed interest in purchasing the assets over the past six months from making firm offers that were acceptable to Peninsula.

The company has now suspended all financial support for the development activities at the Karoo projects, including the progression of mining and prospecting right applications, while discussions were under way with joint venture partners on the way forward.

“The decision to discontinue our financial support for the development of the Karoo projects an to focus our attention on the Lance projects in Wyoming, is regarded as the best approach to building value for our shareholders,” said Peninsula MD and CEO Wayne Heili.

“In this enduring difficult uranium market, it has proven unrealistic to attribute any value to the Karoo project. The company has undertaken a difficult decision, but there is no value to be gained through continued investment in a secondary higher cost project,” he added.