PERTH (miningweekly.com) – Uranium miner Peninsula Energy has signed a long-term offtake agreement with a major European utility.
Under the terms of the agreement, Peninsula would sell some four-million pounds of uranium oxide (U3O8) from its Lance project, in the US, over a ten-year period, starting at the end of 2020.
The contract also allowed for an increase in sales of some 50% of the annual Lance production, from 2026 onward.
“Peninsula is very pleased to execute this contract as it adds geographical diversity to our sales portfolio,” said MD and CEO Gus Simpson on Friday.
“It is an important vote of confidence in our projects, management and ability to deliver uranium well into the future. In addition, we have worked with the utility for several years during the evaluation period, and we anticipate a long and mutually beneficial relationship.”
While price and annual quantities were subject to commercial confidentiality, the terms of the agreement provided certainty of sale and a committed revenue stream, Simpson added.
The Lance project produced its first uranium in December of last year, and would produce between 500 000 lb and 700 000 lb of U3O8 a year during the first stage of development. Production would increase to 1.2-million pounds a year of U3O8 in the second stage of development.
Stage 3 development would further increase production to 2.3-million pounds a year of U3O8.