Peninsula Energy's Lance Uranium Project Update - July 2024
PEN (PEN) Share Update July 2024 Tuesday 30th
Peninsula Energy Advances Lance Uranium Project Towards Late 2024 Production
Peninsula Energy Limited (ASX:PEN) has announced significant progress in the development of its Lance Uranium Project in Wyoming, USA, with an aim to recommence production operations by late 2024.
Instant Summary:
- Site preparations at Lance Uranium Project are rapidly progressing.
- Overall construction activities are on schedule.
- Major equipment procurement is tracking budget and schedule.
- Development of Mine Unit 3 remains on track for uranium recovery operations by year-end 2024.
- Low pH pre-conditioning flows in Mine Unit 1 commenced in July.
- Laboratory and pilot plant optimization tests are ongoing to improve uranium recoveries.
- Initial production ramp-up expectations adjusted, sustaining cash flow projection remains unchanged.
Project Progress
Peninsula Energy Limited, along with its subsidiary Strata Energy Inc., has reported that the Lance Uranium Project in Wyoming is progressing well. The company is modifying and expanding the Ross uranium recovery process plant and auxiliary facilities to increase production capacity using a low-pH ISR process. This expansion, known as Phase II, will enable the plant to produce up to 2 million pounds of dry yellowcake annually.
In June 2024, Peninsula received the Wyoming Governor’s Safety Award for the third consecutive year, highlighting its commitment to safety. Managing Director and CEO Wayne Heili expressed satisfaction with the rapid progress and the site's energetic atmosphere.
Construction and Equipment
All major piping and tank modifications for low-pH ISR operations have been completed. Approximately 87% of the building foundations are installed, with the remaining foundations left open for better access to set structural steel and process equipment. The plant construction schedule will shift to a 24-hour rotation in August.
Equipment procurement is on schedule, with major equipment ordered and some delivered ahead of time. The first piece of major equipment arrived six weeks early, and process tanks for the southern half of the building are on site. Overall, equipment costs are tightly tracking the budget.
Wellfield Development
Development of new wellfield facilities continues, with Mine Unit 3 (MU-3) being actively developed. Installation of the required monitoring well network for MU-3 was completed in 2023, and regulatory review is underway. The company has eleven drilling rigs under contract to install ISR pattern wells in MU-3, with significant progress made in preparing Header House 11 for pre-conditioning operations in Q3 2024.
Operational Activities
Pre-conditioning operations in Mine Unit 1 commenced in July, reducing the wellfield solution pH to approximately 2.0 standard units. This process is expected to take two to three months before introducing the wellfield to the uranium recovery circuit. Laboratory and pilot scale tests are ongoing to ensure high-quality production and operational efficiency.
Production Guidance
Peninsula has adjusted its initial production ramp-up expectations, now projecting between 0.7M lbs and 0.9M lbs for CY2025, down from the previous estimate of 1.1M lbs. The company’s current cash balance is expected to support operations until self-sustaining cash flows are generated, projected for Q3 2025.
The progress at the Lance Uranium Project is a positive development for Peninsula Energy, potentially boosting investor confidence and stock value as the project nears production. The company's commitment to safety and efficient project management enhances its reputation and operational reliability.
Investor Reaction:
Analysts are likely to view the steady progress and adherence to budget positively, although the slight reduction in initial production ramp-up may temper some enthusiasm. Overall, the news is expected to be well-received, given the clear path towards production and revenue generation.
Conclusion:
Investors should keep an eye on Peninsula Energy's updates as the Lance Uranium Project progresses towards production. The company's strategic advancements and commitment to safety position it well for future growth. Stay informed and consider the potential long-term benefits of this development.