Peninsula Energy Ltd Definitive Feasibility Study Positions Lance Projects as Globally Competitive ISR Uranium Operations
Peninsula Energy Ltd (ASX:PEN, OTCQB:PENMF) has released a Definitive Feasibility Study (DFS) demonstrating a strong economic case for the company’s three Lance In-situ Recovery (ISR) uranium projects – Ross, Kenrick and Barber – in Wyoming, USA.
Peninsula has transitioned its Lance projects from an alkaline ISR method to a low pH recovery operation, which has the potential to increase uranium recoveries without compromising public health, worker safety or the environment.
In total, the projects hold some 53.7 million pounds of JORC-compliant uranium resources.
The DFS only includes the Ross and Kendrick resources, which total 21.8 million tonnes, highlighting the potential for future growth.
“Unique Competitive Advantage”
“We have been focused on the methodical and efficient application of the low pH SRI process to our flagship project,” said Wayne Heili, Managing Director and CEO of Peninsula Energy.
“Peninsula has a unique competitive advantage in being the only U.S.-based uranium company licensed to use the industry-leading low pH ISR method.
“Based on the advanced stage of development of the Ross producing area, Peninsula has a rapid time-to-market opportunity that will allow the company to capitalize on current opportunities in the uranium market.
“Peninsula is working toward a Final Investment Decision (FID) in 2022 to resume uranium operations at Lance, and the completion of this DFS was a key deliverable to enable the board and management of the company to assess the economics and long-term potential of the project.
Peninsula’s DFS incorporates the results of a series of technical risk reduction activities, including the low pH MU1A ISR field demonstration.
Read: Peninsula Energy Successfully Concludes Lance Uranium Project Low pH Field Demonstration Operations
DFS key results include life-of-mine (LoM) production of 14.4 million pounds of uranium, gross revenue of US$895 million and a stable production rate of 2 million pounds of uranium per year from the fourth year of production.
Economically, DFS predicts a pre-tax net present value (NPV) with an 8% discount rate of $125 million and an internal rate of return (IRR) of 43% based on a price of average sale of US$62.38 per pound of uranium. .
The DFS projects LoM all-in costs of $45.74 per pound of uranium produced, with an all-in sustaining cost (ASIC) of $29.08 per pound and a direct operating cost of $16.34 per book.
“The DFS relies on a quality resource and detailed technical assessments. The results highlight Lance’s exciting economic potential,” Heili continued.
“The feasibility conclusion is underpinned by a combination of very low capital intensity, low operating costs, competitive all-in sustaining costs, short lead time to production, and entirely risk-free technical and regulatory regimes. .
“Most importantly, the results confirm that the company is exceptionally well positioned to move forward with a development decision under the current dynamics of the uranium market.
FID to consider in the second semester
The company expects to reach a final investment decision (FID) on the restart of the Lance projects in the second half of this calendar year.
The preparatory work program to develop Lance for this final decision will be funded from Peninsula’s current cash.
“The board is extremely pleased with the results and would like to thank our staff and contractors for their commitment and hard work,” Heili said.
“Importantly, the results reaffirmed that Peninsula has a globally competitive uranium production center in the Lance projects and that the return to production pathway for Lance is well defined and low risk. .”