Name of the Project
Lance uranium project.

Location
The Lance projects are located on the north-east flank of the Powder river basin, in Wyoming, in the US.

Project Owner/s
Peninsula Energy.

Project Description
A feasibility study on the projects has confirmed the economic viability of transitioning to a low-pH in situ recovery operation.

The Lance projects comprise the Ross, Kendrick and Barber production areas, which have a total mineral resource estimate of 48.9-million tonnes grading 473 parts per million of triuranium oxide.

Current alkaline in situ recovery operations at the project are authorised to mine only the Ross production area.

The study proposes a staged expansion of the current operational facility into a full central processing plant (CPP), which includes elution, precipitation and drying equipment at Ross followed by the construction of a satellite plant at Barber. Kendrick will operate as an extension of Ross, with mining solutions pipelined to and from the Ross CPP.

The feasibility study envisages three stages of uranium production capacity:

Stage 1 will include the changeover of the current facility and wellfields to use low pH solutions at the existing flow capacity of 3 750 galons per minute (gpm) through the ion exchange (IX) circuit, which will result in a production capacity of about 1.15-million pounds of triuranium oxide a year at an average head grade of 70 ppm. Peninsula will continue to use toll milling services for elution, precipitation and drying. The existing toll milling agreement remains in place until December 30, 2018.

Stage 2 will include the expansion of the current facility, allowing for production flow of up to 7 500 gpm from the Ross and Kendrick areas, the addition of elution systems for the elution of uranium from the IX resins, the addition of precipitation and drying capacity, as well as reserved space for additional equipment in the next stage. Stage 2 changes will result in a production capacity of about 2.3-million pounds triuranium oxide a year at an average head grade of 70 ppm. Stage 2 changes include the capability to produce dried yellowcake on site, eliminating the need for toll milling agreements. Although Ross and the CPP are currently fully permitted, Stage 2 will require permit approval for the operation of wellfields within Kendrick. Stage 3 will include the construction of a 7 500 gpm satellite plant at Barber and the installation of expanded production capacity at the CPP.

Life-of-mine (LoM) production is estimated at 33.4-million pounds triuranium oxide over a 17-year LoM.

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 $156.5 million (real), and an internal rate of return 30%.

Capital Expenditure
LoM capital expenditure (capex), including capex for the transition to low pH operations, ongoing wellfield development, stage 2 and 3 expansion and contingency, is estimated at $461.2-million. The capex, including contingency, to complete the transition to low pH operations is $5.3-million.

Stage 2 expansion capex is estimated at $43.1-million, including contingency, and includes costs to expand the process plant and increase wellfield flow rate capacity from 3 750 gpm to 7 500 gpm.

Stage 3 expansion capex is estimated at $70.3-million, including contingency and includes costs to build a satellite plant and the initial development of wellfields in Barber with a flow rate capacity of 7 500 gpm.

Planned Start/End Date
Not stated.

Latest Developments
Peninsula Energy will raise A$9.1-million through a share placement and entitlement offer to fund work at its Lance uranium project.

An initial A$7-million will be raised through an institutional placement, with 42.42-million shares to be issued at 16.5c each to new and existing institutional and sophisticated investors.

The institutional placement will be undertaken under Peninsula’s existing capacity, and will not require shareholder approval.

The company will also undertake a pro-rata renounceable entitlement offer, priced at 16.5c each, to raise a further A$2.1-million. Under the entitlement offer, shareholders will be able to subscribe for one new share for every 20 shares held.

Peninsula MD and CEO Wayne Heili has said that the company is pleased to strengthen the balance sheet, which will underpin its transition to a low pH operation at the Lance project.

“We feel this placement and entitlement offer is an attractive value proposition for . . . new and existing shareholders, particularly with the near-term positive catalysts that could come through the US President’s implementation of the US Nuclear Fuel Working Group’s recommendations,” Heili has said.

“Peninsula’s efforts to prepare the Lance project for low pH in situ recovery production operations and to strengthen our financial position are . . . forward thinking and timely.”

Funds raised will be used for ongoing site operational costs, low pH derisking and optimisation activities, to buy uranium for delivery to customers under existing contracts, debt servicing costs and general working capital purposes.

Key Contracts and Suppliers
Woodard & Curran (feasibility study).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Peninsula Energy, tel +61 8 9380 9920, fax +61 8 9381 5064 or emailinfo@pel.net.au.