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Lance Projects – Ross and Kendrick production areas, US – update

Location map of the Lance project

Location map of the Lance projects

Photo by Peninsula Energy

19th April 2024

By: Sheila Barradas

Creamer Media Research Coordinator & Senior Deputy Editor

     

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Name of the Project
Lance Projects – Ross and Kendrick production areas.

Location
Wyoming, US.

Project Owner/s
Peninsula Energy.

Project Description
The new life-of-mine (LoM) plan for the Ross and Kendrick production areas completed in August 2023 delivered a robust and resilient project development plan for Lance, including an accelerated production ramp-up schedule.

The Lance project has total Joint Ore Reserves Committee-compliant mineral resources of 53.2-million pounds of uranium.

The ten-year LoM model is based on a total resource base of 21.8-million pounds of uranium estimated to be contained within the production areas. LoM uranium production is estimated at 14.8-million pounds from the production areas.

The production and LoM plan has been developed for steady-state production of 1.8-million pounds of yellowcake a year from Ross and Kendrick.

The LoM model features a complete 5 000 gallons per minute in situ recovery (ISR) plant to produce up to two-million pounds a year of dry yellowcake product.

The Ross facility, built in 2015 as an alkaline ISR satellite facility, is undergoing an expansion to increase its production capacity from one-million pounds a year to two-million pounds a year.  The expansion also aims to add the capability to produce a finished dry yellowcake product, uranium oxide.

Kendrick is the next sequential production area.

The current LoM plan does not include production from Lance’s Barber area, which provides a future expansion opportunity at the project.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a net present value, at an 8% discount rate, of $116.2-million and an internal rate of return of 26%.

Capital Expenditure
LoM capex is estimated at $285.5-million.

Planned Start/End Date
Production is expected to start in late 2024.

Latest Developments
Peninsula Energy has appointed US-based engineering, procurement and construction services group Samuel as the contractor for the plant expansion of the Ross central processing plant.

The decision to expand is a crucial step in Peninsula’s preparations to restart production at the Lance mine. The company recently completed construction activities to transform the original satellite plant for operation using low-pH ISR processes, and the Ross plant expansion is integral to this.

Samuel, which was previously contracted for detailed engineering and initial long lead time equipment procurement works at Lance, is already familiar with the project requirements. Its proposal anticipates that the central processing plant (CPP) facility and capability expansion will be ready for commissioning by late 2024.

However, Samuel’s budgetary pricing estimate for the CPP expansion indicates a higher-than-forecast estimate. The updated capital estimate suggests an additional $20-million requirement. However, Peninsula says the requirement has not significantly increased from the $95-million figure derived from the August 2023 LoM study, mainly owing to improved sales revenue projections driven by the uptick in uranium market prices.

Peninsula is pursuing nonequity funding opportunities to meet the funding requirements, including applying for a US government-funded loan programme and exploring nonbank lending avenues through its appointed debt adviser BurnVoir.

The ASX-listed company has expressed its commitment to resume production at Lance in late 2024.

Key Contracts, Suppliers and Consultants
Western Water Consultants (definitive feasibility study) and Samuel (detailed engineering and initial long lead time equipment procurement works and Ross central processing plant expansion).

Contact Details for Project Information
Peninsula Energy, tel +61 8 6263 4461 or email info@pel.net.au.

Edited by Creamer Media Reporter

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