Peninsula Energy - June 2024 Quarterly Activities Report
PEN (PEN) Share Update July 2024 Wednesday 24th
Peninsula Energy Announces Major Progress in Lance Projects and Successful Equity Raising
Peninsula Energy Limited (ASX:PEN) has released its June 2024 Quarterly Activities Report, highlighting significant progress in the expansion of its Lance Projects in Wyoming and the successful completion of a major equity raising.
Instant Summary:
- EPC contractor mobilized for Ross Central Processing Plant expansion.
- Construction and procurement activities on track for late 2024 production restart.
- 118 production wells drilled, totaling approximately 68,300 feet.
- Mineral Resource Estimate increased by 19.6% to 26.2 million pounds U3O8.
- A$106 million equity raising completed to fund operations through Q3 2025.
- David Coyne appointed as Non-Executive Director.
- Available cash of US$99.9 million as of 30 June 2024.
Lance Projects Progress
Peninsula Energy has made substantial progress in its Lance Projects located in Wyoming, USA. The company has appointed and mobilized an Engineering, Procurement, and Construction (EPC) contractor for the expansion of the Ross Central Processing Plant (CPP). Site preparations have commenced, and construction and procurement activities are on schedule for a production restart in late 2024.
During the quarter, 118 production wells totaling approximately 68,300 feet were drilled. The updated Mineral Resource Estimate (MRE) for the Life-of-Mine study area has increased by 19.6% to 26.2 million pounds U3O8, expanding the Lance Projects' total resources to 58.0 million pounds U3O8.
Corporate Developments
Peninsula Energy successfully completed a fully underwritten A$106 million equity raising, comprising a A$52.9 million Placement and a A$53.1 million Entitlement Offer. The proceeds from the equity raising are expected to fully fund operations at the Lance Projects to sustainable free cash flow in Q3 2025.
David Coyne has been appointed as a Non-Executive Director effective 1 May 2024. The company also reported an available cash position of US$99.9 million as of 30 June 2024.
Operational Highlights
The Lance Projects, comprising the Ross Production Project Area, Kendrick Development Project Area, and Barber Exploration Area, are set to resume production in late 2024. The expanded CPP will have a capacity to produce up to 2.0 million pounds per annum of dry yellowcake (U3O8) product.
Construction efforts have focused on preparing building foundations, with equipment procurement activities remaining on schedule. The company anticipates increasing the number of drilling rigs to 15 by the end of the year to support wellfield development.
Exploration and Safety
Exploration activities within the Ross and Kendrick areas have resulted in a 7.8% increase in the total Lance MRE. No exploration drilling took place during the quarter, but additional drilling programs are planned for the current calendar year.
No Lost Time Injuries (LTIs) were recorded on site during the quarter, and the project surpassed the seven-year mark without an employee incurring an LTI. There were no reportable events of adverse environmental impacts during the quarter.
The progress in the Lance Projects and the successful equity raising are likely to have a positive impact on Peninsula Energy's stock price. The increased Mineral Resource Estimate and the on-schedule construction activities indicate strong future growth potential. The substantial cash position and the appointment of a seasoned Non-Executive Director further enhance investor confidence.
Investor Reaction:
Investors and analysts have reacted positively to the news, noting the company's strategic advancements and strong financial position. The equity raising is seen as a significant step towards achieving sustainable free cash flow by Q3 2025.
Conclusion:
Peninsula Energy's June 2024 Quarterly Activities Report showcases significant progress and strategic advancements. Investors should monitor the company's continued developments and consider the long-term growth potential of the Lance Projects. Stay informed on Peninsula Energy's updates and market insights.