Peninsula Energy (ASX: PEN) has significantly upgraded the JORC Resource Estimate for the Lance uranium projects in Wyoming, USA, to 41.4 million pounds (Mlbs) uranium (U3O8).
Importantly, the Definitive Feasibility Study (DFS) incorporating the updated resource calculation is expected shortly.
The upgrade represents a 25% increase in Total Resource Estimate. There is also a 7% increase in the Measured and Indicated Resource to 11.2Mlbs U3O8. The Measured and Indicated uranium has increased to 27% of the Total Resource.
Also, the Ross Permit Area vanadium Resource has been upgraded to 2.3Mlbs vanadium (V2O5).
The company has achieved this upgrade by the completion of an additional 300 drill holes since the previous upgrade in February 2011.
Gus Simpson, executive chairman, said “we are very pleased with this resource upgrade and the ongoing drill program. It continues to convert areas of mineral potential into further JORC resource and to enhance resource status from Inferred to Indicated and Measured.
This is adding significant value to the Lance project. Importantly, we will now factor this into the DFS model and publish those findings. ”
The Resource has been calculated by applying a combined constraint of a grade thickness product (GT) of 0.2 contour and 200 parts per million (ppm) U3O8.
The company considers these lower cut offs to be appropriate for both calculating and reporting of in-situ recovery (ISR) resources at the Lance Projects.
At Ross (including the Ross Permit Area) there is a now a combined Measured, Indicated and Inferred Resource of 26.2Mlbs U3O8, an increase of 19% from the updated February estimate.
Within the Ross Permit Area the combined Measured, Indicated and Inferred Resource totals 5.90Mlbs U3O8 at an average grade of 499ppm and an average GT of 0.55.
Since the previous resource estimate, drilling within the permit area has been partly designed to test the resource model by targeting the nose (high grade) portion of the roll front systems.
This drilling campaign has produced an overall increase in grade within the permit area from 478ppm to 498ppm U3O8.
Drilling outside the permit area has largely been focussed on exploration for new roll front systems and on converting inferred resource to indicated resource.
The wider-spaced exploration drilling has resulted in the overall resource grade outside the permit area marginally decreasing, however, at the same time the overall resources have increased significantly.
The Lance project covers an area of over 120 square kilometres within which there is a combined total of at least 305 line kilometres (190 miles) of known stacked roll fronts.
Of this total, only a small percentage has been explored with over 90% of the drilling concentrated within the more advanced Ross and Barber areas.
Peninsula said future in-fill drilling will be targeted at the nose (high grade) portion of the roll fronts and a general uplift in grade is anticipated.
Resource conversion and exploration drilling will continue with one rotary mud rig employed in the northern Ross area and a second rig engaged at Barber to identify additional uranium mineralisation in the area and increase the resource inventory at Barber.
On-going drilling will continue to upgrade existing Inferred Resources to Indicated or Measured Status in addition to converting the numerous areas of mineralised potential.
One drilling rig is currently dedicated to the Barber area in order to delineate sufficient mineralisation to support the planned remote ion exchange (IX) plant that will provide additional feed to the central processing plant (CCP) to be located at Ross.
Peninsula controls the majority of the surface and minerals rights in the Oshoto Region and is currently acquiring additional areas that are considered prospective for roll front style uranium mineralisation.
In February Peninsula signed a first sales agreement to supply 1.15 million pounds of uranium oxide over seven years to a Tier 1 power utility in the U.S., representing a significant milestone for the company as it will generate short term cash flows.
Peninsula has targeted 2012 to begin producing uranium from the Lance projects, and aims to become one of the largest producers of uranium in the U.S.