Peninsula Energy Ltd (ASX:PEN, OTCQB:PENMF) has released a definitive feasibility study (DFS) demonstrating a robust economic case for the company’s three Lance In-situ Recovery (ISR) Uranium Projects – Ross, Kenrick and Barber – in Wyoming, United States.
Peninsula has been transitioning its Lance projects from an alkaline ISR method to a low-pH recovery operation, which has the potential to increase uranium recoveries without compromising the public health, worker safety or the environment.
In total the projects hold some 53.7 million pounds of JORC-compliant uranium resource.
The DFS includes only 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 methodically and efficiently applying the low pH ISR process to our flagship project,” Peninsula Energy managing director and CEO Wayne Heili said.
“Peninsula has a unique competitive advantage in being the only US-based uranium company authorised to use the industry leading low pH ISR method.
“Based on the advanced development stage of the Ross Production Area, Peninsula has a rapid speed-to-market pathway opportunity that will allow the company to leverage current uranium market opportunities.
“Peninsula has been working towards a Final Investment Decision (FID) in 2022 to recommence uranium operations at Lance, and completion of this DFS was a key deliverable to allow the company’s board and management to assess the economics and long-term potential of the project.”
Details of the DFS
Peninsula’s DFS incorporates findings from a technical de-risking suite of activities, including the MU1A Low-pH ISR field demonstration.
Read: Peninsula Energy successfully concludes Lance Uranium Project low-pH field demonstration operations
Key results from the DFS include a life-of-mine (LoM) production of 14.4 million pounds of uranium, a gross revenue of US$895 million and a steady production rate of 2 million pounds of uranium per annum from the fourth year of production.
Economically, the DFS predicts a pre-tax net present value (NPV) with a discount rate of 8% of US$125 million and a 43% internal rate of return (IRR) based on an average sale price of US$62.38 per pound of uranium.
The DFS forecasts LoM all-in costs of US$45.74 per pound of produced uranium, with an all-in sustaining cost (ASIC) of US$29.08 per pound and a direct operating cash cost of US$16.34 per pound.
“The DFS is underpinned by a quality resource and detailed technical evaluations. The results highlight the exciting economic potential of Lance,” Heili continued.
“The feasibility conclusion is supported by a combination of very low capital intensity, low operating costs, competitive all-in sustaining costs, a short timeline to production and fully de-risked technical and regulatory regimes.
“Importantly, the results confirm that the company is exceptionally well positioned to move ahead towards a development decision within the current dynamics of the uranium market.”
FID to be considered in second half of year
The company expects to reach a final investment decision (FID) on the Lance projects’ restart in the second half of this calendar year.
The preparatory works program to develop Lance for that final decision will be funded from Peninsula’s current cash holdings.
“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 findings have re-affirmed that Peninsula possesses a globally competitive uranium production centre at the Lance projects and that the pathway back to production for Lance is well defined and low risk.”