PERTH (miningweekly.com) – Uranium developer Peninsula Energy has warned of a "significant delay" in the restart of production at its Lance uranium project, in Wyoming.
The company in May this year flagged an initial delay in the restart of commercial production from the first quarter of this year until mid-2023, resulting from delays in the delivery of equipment.
The ASX-listed company on Wednesday announced that resin processing provider Uranium Energy Corp (UEC) had now terminated the agreement to treat loaded resins and produce dry yellowcake from the Lance project.
The decision has prompted Peninsula to adopt a plan to accelerate the in-house development of an expanded and fully optimised production plant to produce a high-quality yellowcake product free of impurities, aligning with the restart of production at Lance. The decision to accelerate the in-house development of resin processing and yellowcake production is likely to result in a significant delay to the previously announced imminent restart of production at Lance, Peninsula said.
“Faced with the unexpected challenge of not being able to rely on the processing services of our long-term service provider, we are now recalibrating our business plan to operate independently from our industry peers and to bring forward the in-house capability to produce finished yellowcake,” said Peninsula MD and CEO Wayne Heili.
“While a delay to our planned restart is disappointing, we anticipate emerging with an expanded production capacity and a lower operating cost profile because of this endeavour. We are also evaluating an accelerated schedule towards full capacity. Analysis of the impact of this action on operational plans and funding requirements are underway and we will keep the market posted on key developments as they occur.”
Heili said that initial analysis indicated the revised plan would ultimately deliver a faster ramp-up to full capacity under a more efficient and capital-effective operation. Implementing in-house processing from the start of production would ensure the company independently executed its business plan which included producing uranium at an expanded rate, without a reliance on services from industry competitors.
Having been on the verge of a production restart, the Lance team will continue to advance plant site preparation and wellfield development activities for the future restart of commercial uranium production operations.
The definitive feasibility study for Lance estimated a life-of-mine capital cost of $290.6-million, with the Stage 1 operation requiring an up-front capital investment of $2.7-million and a wellfield replacement and sustaining capital expenditure of $16.3-million.
The Stage 2 plant and wellfield expansion would require a further $69.9-million investment, while the wellfield replacement and sustaining capital would require a further $196-million investment.
The Lance project holds a Joint Ore Reserves Committee-compliant resource of 53.7-million pounds of uranium oxide, making it one of the largest uranium production development projects in the US.