Name of the Project
Lance uranium projects.

Location
Wyoming, US.

Client
Strata Energy, a wholly owned subsidiary of Peninsula Energy.

Project Description
Peninsula’s board has approved a lower-cost three-stage scalable production development plan for its Lance projects.

The scalable production development plan comprises a three-stage ramp-up strategy.

Stage 1 entails a production rate of between 500 000 lbs/y and 700 000 lbs/y of uranium (U₃O₈) and includes:
• up to seven wellfield units in simultaneous operation;
• the installation and commissioning of six ion-exchange columns in the central processing plant (CPP); and
• the significant reduction in initial CPP building structure and footprint – from the original design parameters – to house the reduced plant and equipment.

Stage 2 involves a production rate of 1.2-million pounds of U₃O₈ a year and entails:
• up to 14 wellfield units in simultaneous operation;
• the expansion of the CPP building structure and footprint to accommodate additional processing equipment;
• the installation and commissioning of an additional six ion-exchange columns in the CPP, increasing the total number of ion-exchange columns to 12; and
• the installation of elution, drying and packaging equipment in the expanded CPP.

Stage 3 involves a production rate of 2.3-million pounds of U₃O₈ a year and entails:
• the development of 14 wellfield units in Barber;
• the construction of a satellite plant comprising 12 ion-exchange columns and a reverse osmosis module at Barber; and
• the trucking of loaded resin from the satellite plant to the CPP for treatment and packaging.

The scalable production development plan significantly reduces the initial funding required to initiate sustainable production at the Lance projects, decreases the volume of U₃O₈ needed to be contracted in Stage 1 and enables the company to defer most of the planned uranium sales contracts until the uranium price is more favourable.

Further, commissioning of the processing facility and wellfield operations in Stage 1 significantly derisks Stage 2 and Stage 3 upgrades.

Jobs to be Created
Not stated.

Net Present Value/Internal Rate of Return
The project has an unlevered pretax net present value, at 8%, of $288-million and a pretax internal rate of return of 36%.

Value
Remaining capital expenditure (capex) for Stage 1, including contingency, is $33-million.
Capex for Stage 2, including contingency, is $35-million.
Capex for Stage 3, including contingency, is $78-million.

Duration
Not stated.

Latest Developments
Peninsula Energy has raised A$8.5-million through a share placement, and flagged a possible A$5-million raising through a share purchase plan (SPP) to fund its streamlined strategy for the Lance project.

Peninsula has told shareholders that 17-million ordinary shares have been issued to institutional and sophisticated investors at 50c each.

In addition to the placement, Peninsula is hoping to raise as much as A$5-million through a similarly priced SPP, enabling shareholders to subscribe for up to A$15 000 in new shares.

MD and CEO Gus Simpson has said that the funding will enable the company to continue the production ramp-up at Lance while implementing a more streamlined operating strategy to meet deliveries under existing contracts, and to provide certainty on the convertible loans.

The streamlined operational strategy will result in an estimated 500 000 lb of U₃O₈ delivered in the next 12 months to meet existing contract deliveries, and will provide for revenues of about A$36.3-million in 2017.

Under the strategy, Peninsula will defer Stage 2 capex at Lance until the receipt of additional contracts, and will create a platform for rapid production expansion.

The streamlined strategy is necessitated by the current uranium market conditions, Simpson has said, and will remain in place until uranium prices have normalised.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Peninsula Energy, tel +61 8 9380 9920, fax +61 8 9381 5064.