http://www.proactiveinvestors.com.au Proactiveinvestors RSS feed en Mon, 24 Jul 2017 15:00:52 +1000 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) <![CDATA[News - Peninsula Energy managing director buys shares on-market ]]> http://www.proactiveinvestors.com.au/companies/news/179352/peninsula-energy-managing-director-buys-shares-on-market-179352.html Peninsula Energy (ASX:PEN) has had 115,000 shares purchased by its managing director and CEO, Wayne Heili.

Heili purchased the 115,000 shares for $37,689.86 resulting in an average price of $0.3277.

Peninsula is currently experiencing improved operational performance at its flagship Lance Projects located in Wyoming, U.S.

The daily rate of uranium production recently increased to above 400 pounds per day, a 40% increase from the March 2017 quarter daily average.

Production in the June quarter is expected to be circa 30,000 pounds of uranium oxide which is a 20% improvement over the March 2017 quarter.

The Lance Projects have a mine life of at least 20 years, underpinned by 53.7 million pounds of uranium, the largest uranium ISR JORC-Code compliant resource in North America.

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Fri, 16 Jun 2017 12:30:00 +1000 http://www.proactiveinvestors.com.au/companies/news/179352/peninsula-energy-managing-director-buys-shares-on-market-179352.html
<![CDATA[News - Peninsula Energy has Buy rating reiterated by New York broker ]]> http://www.proactiveinvestors.com.au/companies/news/179346/peninsula-energy-has-buy-rating-reiterated-by-new-york-broker-179346.html Peninsula Energy (ASX:PEN) has had its Buy rating reiterated by New York based investment bank, Rodman & Renshaw.

The investment bank continues to forecast upside with a A$1.75 price target supported by Peninsula’s long term uranium contracts continuing to provide healthy margins.

An extract from the report is below:


On June 14, 2017, Peninsula provided an update for its operations at the Lance Projects.

The firm is expected to produce 30,000 pounds of uranium in the quarter ending in June, which would be a 20% improvement over the prior quarter ending in March.

Operations have improved, with the daily average rate of production increasing almost 40% from the prior quarter.

We note that the average daily rate of production in the current quarter was above 400 pounds per day, in part due to additional Header houses.

Header houses 5 and 6 were activated in 2017, and production has improved at each since they were brought online.

In May, header house 7 was turned to the Central Processing Plant (CPP) and also began contributing to total production.

Overall, operating wells have responded favorably to multiple improvement initiatives implemented by the company in the current quarter.


Additional production options are expected to come online.

Construction at Header house 8 is now complete, and the house has began operating in re-circulation mode.

The company anticipates turning header house 8 towards the CPP in July. At the same time, the company plans to continue with the roll out of header houses 9 and 10 as well.

While we do not expect the additional capacity to be used to ramp up production in the near future, we do think it may provide increased flexibility in allowing optimization of average uranium grades among the various header houses and a shorter-term ramp-up of operations once prices improve.


Lower production to continue in the near term.

We note that current production target levels should remain subdued as additional production isn't needed to fulfill the company's sourced delivery commitments under existing contracts.

The company has contracted sales for 7.7 million pounds of uranium through 2030 at a weighted average delivery price of $54 per pound.

In addition, the company has contracted to purchase 900,000 pounds of uranium over the next three years at an average cost of $25 per pound.

We think that limiting the company's exposure to the current weak uranium price environment by making additional purchases at the current spot price makes sense.


Long-term contracts should help to maintain healthy margins.

Given that Peninsula has a number of long-term contracts totaling 7.7 million pounds at an average price of $54 per pound, we believe that substantial margins should continue to be realized despite the current weak uranium price.

With spot purchases over the next few years around $25, the company could maintain margins above 50%, which is extremely impressive in today's market.

We still envision the Stage 2 expansion beginning in 2019 with the incremental Stage 3 expansion beginning in 2022.

However, until these expansions are initiated, we expect the company to maintain healthy margins by producing less and purchasing more at the spot price.


We are reiterating our Buy rating and A$1.75 per share price target.

Our valuation remains predicated on a DCF of operations at the Lance Projects utilizing a 10.0% discount rate and average uranium sales price of $53 per pound in 2017 and $55 per pound thereafter in-line with PEN’s long-term contractual commitments.

We continue to view Peninsula as a defensive uranium name, primarily due to the existence of higher-priced, long-term contracts.

In our view, these contracts should not only allow Peninsula to survive the current downturn, but position the firm to thrive once prices increase and expansion plans are moved forward.

 

Risks. 1) Financing risk; 2) uranium price risk; 3) operating and technical risk; 4) political risk.

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Fri, 16 Jun 2017 08:00:00 +1000 http://www.proactiveinvestors.com.au/companies/news/179346/peninsula-energy-has-buy-rating-reiterated-by-new-york-broker-179346.html
<![CDATA[News - Peninsula Energy increasing daily rate of uranium production ]]> http://www.proactiveinvestors.com.au/companies/news/179192/peninsula-energy-increasing-daily-rate-of-uranium-production-179192.html Peninsula Energy (ASX:PEN) is seeing improved operational performance during the current June quarter at its flagship Lance Projects located in Wyoming, U.S.

The daily rate of uranium production has now increased to above 400 pounds per day, a 40% increase from the March 2017 quarter daily average.

Production in the June quarter is expected to be circa 30,000 pounds of uranium oxide which is a 20% improvement over the March 2017 quarter.

The Lance Projects have a mine life of at least 20 years, underpinned by 53.7 million pounds of uranium, the largest uranium ISR JORC-Code compliant resource in North America.

Multiple headers houses are used to extract uranium and currently seven header houses are in simultaneous operation.

Construction on header house 8 is now complete and the roll out of header houses 9 and 10 will continue.

The improvement in production evident this quarter continues to support guidance for the year of a minimum of 150,000 pounds uranium oxide for the 2017 calendar year.

 

Uranium contracts

Current production target levels have been set to meet Lance Projects sourced delivery commitments under existing term contracts.

In the current low uranium spot price environment, the company has contracted to purchase 900,000 pounds uranium oxide over the next 3 years at an average cost of US$25 per pound to meet additional non-Lance Project sourced delivery commitments under term contracts.

With up to 7.7 million pounds uranium oxide of remaining contracted sales through to 2030 at a weighted average delivery price of US$54 per pound, Peninsula is able to limit its exposure to the spot market during periods of low prices. 

In summary, Peninsula continues to buy its uranium at much lower prices than which it is selling it.

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Wed, 14 Jun 2017 12:30:00 +1000 http://www.proactiveinvestors.com.au/companies/news/179192/peninsula-energy-increasing-daily-rate-of-uranium-production-179192.html
<![CDATA[News - Peninsula Energy buying uranium low, selling high ]]> http://www.proactiveinvestors.com.au/companies/news/177689/peninsula-energy-buying-uranium-low-selling-high-177689.html Peninsula Energy (ASX:PEN) is forecasting a cash positive current June quarter, largely thanks to its contract sales book that that has locked in an averages sales price of US$54 per pound.

To illustrate, year to date, Peninsula has sold 250,000 pounds of uranium at an average price of US$54 per pound.

Of this 250,000 pounds sold, 100,000 pounds was produced from Peninsula’s flagship Lance Projects located in Wyoming, U.S. and the remaining 150,000 pounds was purchased.

Peninsula is buying its uranium much lower than it is selling it, with contracts secured to purchase a further 300,000 pounds over the next 3 years at an average price of US$25 per pound.

Existing contracts over the next decade have a projected revenue of US$420 million meaning Peninsula is ideally positioned for a future rebound in uranium prices.


Background

Peninsula is producing uranium from the Lance Projects in the U.S. state of Wyoming.

The Lance Projects have a mine life of at least 20 years, underpinned by 53.7 million pounds of uranium, the largest uranium ISR JORC-Code compliant resource in North America.

Production for the previous March quarter was 25,2938 pounds uranium.

Multiple headers houses are used to extract uranium and currently seven header houses are in simultaneous operation.

Header house #8 is under construction and is due online in the current June quarter.

Peninsula also owns 74% of the undeveloped Karoo Projects in South Africa, which have a JORC resource of 56.9 million pounds uranium grading 1,108 ppm.

Karoo has the potential to be a second long-life asset for Peninsula.


Uranium market commentary

A common theme in the uranium market is production restraint with a number of the large uranium miners cutting production by 10-12% in the March quarter.

However, the demand for carbon-free nuclear power continues to grow with utilities now having over 800 million pounds of uranium uncovered over the next 10 years.

The consensus is that the secondary supplies can’t and won’t cover this supply gap over the long term.


All eyes on Peninsula

Peninsula has been recognised as a compelling place to be to play a uranium rebound and this is recognised by both its major shareholders and research coverage.

It boasts major shareholders that include Resource Capital Funds, Pala Investments, Global X Funds, BlackRock Funds and Areva.

Peninsula is currently covered by five research houses.

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Fri, 12 May 2017 11:00:00 +1000 http://www.proactiveinvestors.com.au/companies/news/177689/peninsula-energy-buying-uranium-low-selling-high-177689.html
<![CDATA[News - Peninsula Energy outlines board changes ]]> http://www.proactiveinvestors.com.au/companies/news/175483/peninsula-energy-outlines-board-changes-175483.html Peninsula Energy (ASX:PEN) has advised that John (Gus) Simpson will be stepping down from his position as managing director and chief executive officer and also from the board of the company and all its subsidiaries, effective immediately.

Peninsula is producing uranium from the Lance Projects in the U.S. state of Wyoming.

The company noted in a statement that the decision follows careful consideration by the board of the key operational and commercial priorities for Peninsula in the near term and beyond, together with the skillsets required to further progress the company.

Wayne Heili, an experienced uranium mining executive, has been appointed to the role of managing director and chief executive officer, effective 3 April 2017.

John Harrison, chairman, commented: "We are fortunate to be able to secure such a highly qualified senior uranium executive at this important time for the
company.

"Wayne oversaw the development and operation of the successful Lost Creek insitu uranium project in Wyoming and brings industry specific operational and corporate expertise to the company as we progress the ramp-up of the Lance Projects and studies at the Karoo Projects."


Other changes

Warwick Grigor and Richard Lockwood have also agreed to step down from the board.

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Tue, 28 Mar 2017 11:00:00 +1100 http://www.proactiveinvestors.com.au/companies/news/175483/peninsula-energy-outlines-board-changes-175483.html
<![CDATA[News - Peninsula Energy flooded with demand for in-the-money raising ]]> http://www.proactiveinvestors.com.au/companies/news/174572/peninsula-energy-flooded-with-demand-for-in-the-money-raising-174572.html Peninsula Energy (ASX:PEN) has resolved to increase its share purchase plan (SPP) to raise $14.2 million from the original $6.5 million after receiving overwhelming demand.

The SPP increase came after the company received more than 1,340 applications from eligible shareholders for a total of $15.02 million.

With shares trading at $0.62, the offer was in-the-money as eligible shareholders were able to subscribe for up to $15,000 worth of shares priced at $0.50.

In line with Peninsula’s debt reduction drive, additional proceeds from the SPP will be used to repay all debt drawn on the Investec revolving loan facility.

Gus Simpson, managing director, commented: “In light of the significant SPP demand, the board felt it appropriate to maximise shareholder participation by keeping the scale back to a minimum.”


Background

Peninsula is producing uranium from the Lance Projects in the U.S. state of Wyoming.

The Lance Projects have a mine life of at least 20 years, underpinned by 53.7 million pounds of uranium, the largest uranium ISR JORC-Code compliant resource in North America.

Production for the 6 months ended 31 December 2016 was 84,000 pounds uranium.

Multiple headers houses are used to extract uranium and Stage 1 steady state production will see up to seven header houses in simultaneous operation.

Funding from the recent capital raisings will be used for the construction and roll-out of additional header houses (header houses #8 to #10) at the Lance Projects.

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Fri, 10 Mar 2017 09:30:00 +1100 http://www.proactiveinvestors.com.au/companies/news/174572/peninsula-energy-flooded-with-demand-for-in-the-money-raising-174572.html
<![CDATA[News - Peninsula Energy closes heavily oversubscribed share purchase plan ]]> http://www.proactiveinvestors.com.au/companies/news/174343/peninsula-energy-closes-heavily-oversubscribed-share-purchase-plan-174343.html Peninsula Energy (ASX:PEN) has been swamped by existing shareholders wanting to participate in the company's share purchase plan (SPP).

The SPP was priced at $0.50, the same as a price as the recent placement, and a recent increase in the uranium price had the offer trading in-the-money.

Peninsula last traded at $0.67.

The underwritten SPP was for A$6.5 million, and was heavily oversubscribed attracting 1340 applications for circa A$15.47 million.

A scale back is expected, with details to come.

The issue date for the SPP shares is 13 March 2017.

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Tue, 07 Mar 2017 10:00:00 +1100 http://www.proactiveinvestors.com.au/companies/news/174343/peninsula-energy-closes-heavily-oversubscribed-share-purchase-plan-174343.html
<![CDATA[News - Peninsula Energy's in-the-money offer gets snapped up with glee ]]> http://www.proactiveinvestors.com.au/companies/news/173643/peninsula-energy-s-in-the-money-offer-gets-snapped-up-with-glee-173643.html Peninsula Energy (ASX:PEN) has recently had a share price re-rating on the back of a surging uranium price.

The timing happened to be spot on for shareholders, and following a placement at $0.50 per share, the company priced the share purchase plan (SPP) at the same level.

Peninsula last traded at $0.68, and has been as high as $0.91 this year.

The SPP for $6.5 million is fully-underwritten, and Peninsula said that valid applications received as at the close of business on Wednesday 22 February 2017 totalled $5.9 million, representing a 91% take up to date.

Eligible shareholders can apply for either of the following denomination parcels: $2,500, $5,000, $7,500, $10,000, $12,500 or $15,000.

Peninsula added that applications may be scaled back based on demand.

Offer closes: 5.00 pm (Perth time) 3 March 2017.

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Fri, 24 Feb 2017 08:00:00 +1100 http://www.proactiveinvestors.com.au/companies/news/173643/peninsula-energy-s-in-the-money-offer-gets-snapped-up-with-glee-173643.html
<![CDATA[News - Peninsula Energy: Global X Management once again increases stake ]]> http://www.proactiveinvestors.com.au/companies/news/173359/peninsula-energy-global-x-management-once-again-increases-stake-173359.html Peninsula Energy's (ASX:PEN) substantial holder, Global X Management Company Co LLC, continues to increase its stake in the uranium producer.

Global X now holds 8.68%, up from 7.46%.

This is the third time over the past month the fund has notified an increased change of interests.

Peninsula is producing uranium from the Lance Projects which have a mine life of at least 20 years, underpinned by 53.7 million pounds, the largest uranium ISR JORC-Code compliant resource in North America.


In-the-money share-purchase-plan

Peninsula has opened its in-the-money share purchase plan, offering shares at $0.50, which is the same price as the recent placement.

Following a rebound in the uranium price, Peninsula is trading at circa $0.74 a share.

Eligible shareholders can apply for either of the following denomination parcels: $2,500, $5,000, $7,500, $10,000, $12,500 or $15,000.

Peninsula added that applications may be scaled back based on demand, as the offer is seeking to raise $6.5 million.

Offer closes: 5.00 pm (Perth time) 3 March 2017.

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Mon, 20 Feb 2017 08:30:00 +1100 http://www.proactiveinvestors.com.au/companies/news/173359/peninsula-energy-global-x-management-once-again-increases-stake-173359.html
<![CDATA[News - Peninsula Energy opens in-the-money share purchase plan ]]> http://www.proactiveinvestors.com.au/companies/news/172894/peninsula-energy-opens-in-the-money-share-purchase-plan-172894.html Peninsula Energy (ASX:PEN) has now opened its in-the-money share purchase plan, offering shares at $0.50, which is the same price as the recent placement.

Peninsula shares last traded at $0.78, with recent strong gains due to the uranium price increasing by around one-third.

Eligible shareholders can apply for either of the following denomination parcels: $2,500, $5,000, $7,500, $10,000, $12,500 or $15,000.

Peninsula added that applications may be scaled back based on demand, as the offer is seeking to raise $6.5 million.


Key details:

- Offer closes: 5.00 pm (Perth time) 3 March 2017.
- Issue of new shares: 13 March 2017.
- Quotation of new shares on ASX: 14 March 2017.
- Dispatch of holding statements: 14 March 2017.

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Thu, 09 Feb 2017 12:30:00 +1100 http://www.proactiveinvestors.com.au/companies/news/172894/peninsula-energy-opens-in-the-money-share-purchase-plan-172894.html
<![CDATA[News - Peninsula Energy's substantial holder continues to lift stake ]]> http://www.proactiveinvestors.com.au/companies/news/172886/peninsula-energy-s-substantial-holder-continues-to-lift-stake-172886.html Peninsula Energy's (ASX:PEN) substantial holder, Global X Management Company Co LLC, has once again advised the company of an increased position.

Global X now holds 7.46%, up from 6.40%.

The company is producing uranium from the Lance Projects which have a mine life of at least 20 years, underpinned by 53.7 million pounds, the largest uranium ISR JORC-Code compliant resource in North America.


Share purchase plan underway

Peninsula currently has a share purchase plan open, offering $15,000 at $0.50 a share, the same price as the recent placement.

The company is expected to receive very strong interest as the offer is heavily in the money, with shares currently trading at $0.78.

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Thu, 09 Feb 2017 09:00:00 +1100 http://www.proactiveinvestors.com.au/companies/news/172886/peninsula-energy-s-substantial-holder-continues-to-lift-stake-172886.html
<![CDATA[News - Peninsula Energy to boost cash position with underwritten share plan ]]> http://www.proactiveinvestors.com.au/companies/news/172657/peninsula-energy-to-boost-cash-position-with-underwritten-share-plan-172657.html Peninsula Energy (ASX:PEN) is set to further boost its cash position with the underwriting on a share purchase plan (SPP).

Peninsula is already expected to receive very strong interest as the offer is heavily in the money, as the company's shares have recently traded firmer following a circa 30% jump in the price of uranium.

The company is producing uranium from the Lance Projects which have a mine life of at least 20 years, underpinned by 53.7 million pounds, the largest uranium ISR JORC-Code compliant resource in North America.

Gus Simpson, managing director and CEO, commented:

“We are pleased to offer the opportunity to our existing shareholders to participate in this SPP, which together with the recently completed placement enables the company to continue the production ramp-up under the recently implemented streamlined operating strategy.

"We have seen a buoyant start to the new year in the uranium industry, with increases in the spot price and the announcement that Kazatomprom will reduce production by 10% this year reflected in widespread increases in uranium company valuations.

"This in turn has resulted in an attractively priced investment opportunity for Peninsula’s existing shareholders”.


SPP details

The plan will offer $15,000 at $0.50 a share, the same price as the recent placement.

Offer documents will be dispatched this week.

Peninsula is currently trading at $0.73, and a fortnight ago spiked to $0.91, as the bear market in uranium came to an abrupt halt, and investors scrambled to snap up stocks with exposure to the commodity.

UK stockbroker Numis Securities has underwritten the offer.


Peninsula comment

The company is expecting strong demand, and noted that it may scale back applications to the extent and in the manner it sees fit, if they exceed $6.5 million in aggregate.

Peninsula said eligible shareholders are encouraged to submit their applications early.

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Mon, 06 Feb 2017 09:30:00 +1100 http://www.proactiveinvestors.com.au/companies/news/172657/peninsula-energy-to-boost-cash-position-with-underwritten-share-plan-172657.html
<![CDATA[News - Peninsula Energy substantial holder lifts stake as uranium price rallies ]]> http://www.proactiveinvestors.com.au/companies/news/172316/peninsula-energy-substantial-holder-lifts-stake-as-uranium-price-rallies-172316.html Global X now holds a 6.4% interest, up from 5.32%.

Peninsula is producing uranium from the Lance Projects, which are located in Wyoming, U.S.

Shares in the company have been performing strongly recently, up around 60% since the $8.5 million capital raising in December 2016.

The price of uranium has added a third in value over the time.

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Mon, 30 Jan 2017 07:30:00 +1100 http://www.proactiveinvestors.com.au/companies/news/172316/peninsula-energy-substantial-holder-lifts-stake-as-uranium-price-rallies-172316.html
<![CDATA[News - Peninsula Energy gains a new substantial shareholder ]]> http://www.proactiveinvestors.com.au/companies/news/171569/peninsula-energy-gains-a-new-substantial-shareholder-171569.html Peninsula recently raised $8.5 million through the placement of shares at $0.50 and intends to raise up to an additional $5 million through an in-the-money share purchase plan offer.

The funding will allow Peninsula to implement a streamlined operational strategy to enhance business performance from the uranium-producing Lance Projects located in Wyoming, U.S.


Uranium re-rating

Over the past three weeks, the price of uranium has increased over 20%, potentially signalling the commodity has bottomed out.

Peninsula shares have rebounded circa 70% since the raising, with shareholders now awaiting the next news on the potential share purchase plan.

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Fri, 13 Jan 2017 08:00:00 +1100 http://www.proactiveinvestors.com.au/companies/news/171569/peninsula-energy-gains-a-new-substantial-shareholder-171569.html
<![CDATA[News - Peninsula Energy shares continue to fly high in 2017 ]]> http://www.proactiveinvestors.com.au/companies/news/171438/peninsula-energy-shares-continue-to-fly-high-in-2017-171438.html During December, the company raised $8.5 million through the placement of shares at $0.50 and will look to raise up to an additional $5 million through a SPP at the same price.

Peninsula last traded at $0.78, a significant premium.

The company intends to finalise and announce the results of the SPP shortly.

Peninsula is producing uranium from the Lance Projects which have a mine life of at least 20 years, underpinned by 53.7 million pounds, the largest uranium ISR JORC-Code compliant resource in North America.

Funds raised from both the placement and planned SPP are being used to roll-out header houses 8, 9 and 10 at the Lance Projects and to strengthen the company’s balance sheet.

While Peninsula is insulated from current uranium prices through its existing long term contracts, there have been positive signs in the market with uranium prices bouncing circa 20% off their November lows.

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Wed, 11 Jan 2017 12:00:00 +1100 http://www.proactiveinvestors.com.au/companies/news/171438/peninsula-energy-shares-continue-to-fly-high-in-2017-171438.html
<![CDATA[News - Peninsula Energy responds to ASX query after 36% jump ]]> http://www.proactiveinvestors.com.au/companies/news/171284/peninsula-energy-responds-to-asx-query-after-36-jump-171284.html Peninsula said it was unaware of any reason for the change in trading.

The company did however note that there were widespread increases in the share prices of uranium companies in North America recently, and on the ASX.

The uranium price has increased close to 20% in recent weeks.


Background

Peninsula is producing uranium from the Lance Projects which have a mine life of at least 20 years, underpinned by 53.7 million pounds, the largest uranium ISR JORC-Code compliant resource in North America.

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Mon, 09 Jan 2017 08:30:00 +1100 http://www.proactiveinvestors.com.au/companies/news/171284/peninsula-energy-responds-to-asx-query-after-36-jump-171284.html
<![CDATA[News - Peninsula Energy has a new substantial holder ]]> http://www.proactiveinvestors.com.au/companies/news/170502/peninsula-energy-has-a-new-substantial-holder-170502.html Peninsula Energy (ASX:PEN) has received a notice of initial substantial holder from Global X Management Company Co. LLC, which holds circa 9 million shares, or a 5.03% stake.

Peninsula recently raised $8.5 million through the placement of shares at $0.50 and intends to raise up to an additional $5 million through an in-the-money share purchase plan offer.

The funding will allow the company to implement a streamlined operational strategy to enhance business performance from the uranium-producing Lance Projects located in Wyoming, U.S.


Background

Peninsula is producing uranium from the Lance Projects which have a mine life of at least 20 years, underpinned by 53.7 million pounds, the largest uranium ISR JORC-Code compliant resource in North America.

Uranium extraction from wellfields at the Lance Projects for the quarter ended 30 September 2016 was 54,000 pounds of uranium, an increase of 25,000 pounds of uranium over the quarter ended 30 June 2016.

Multiple headers houses are used to extract uranium and Stage 1 steady state production will see up to seven header houses in simultaneous operation.

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Thu, 15 Dec 2016 11:00:00 +1100 http://www.proactiveinvestors.com.au/companies/news/170502/peninsula-energy-has-a-new-substantial-holder-170502.html
<![CDATA[News - Peninsula Energy raises $8.5M to continue uranium production ramp-up ]]> http://www.proactiveinvestors.com.au/companies/news/170155/peninsula-energy-raises-85m-to-continue-uranium-production-ramp-up-170155.html Peninsula Energy (ASX:PEN) has raised $8.5 million through the placement of shares at $0.50 and intends to raise up to an additional $5 million through an in-the-money share purchase plan offer.

The funding will allow Peninsula to implement a streamlined operational strategy to enhance business performance from the uranium-producing Lance Projects located in Wyoming, U.S.

Shares in Peninsula are trading at $0.54 representing a healthy premium to the placement price of $0.50.

The placement was strongly supported by the company’s major institutional shareholders, Resource Capital Funds VI and Pala Investments.

Gus Simpson, CEO, commented:

"We are pleased to secure this funding which enables the company to continue the production ramp-up, implement a more streamlined operating strategy, meet deliveries under existing contracts and provides certainty on the convertible loans."


Background

Peninsula is producing uranium from the Lance Projects which have a mine life of at least 20 years, underpinned by 53.7 million pounds, the largest uranium ISR JORC-Code compliant resource in North America.

Uranium extraction from wellfields at the Lance Projects for the quarter ended 30 September 2016 was 54,000 pounds of uranium, an increase of 25,000 pounds of uranium over the quarter ended 30 June 2016.

Multiple headers houses are used to extract uranium and Stage 1 steady state production will see up to seven header houses in simultaneous operation.


Use of funds

Funds from the placement and share purchase plan will be used for:

- The construction and roll-out of additional header houses (header houses #8 to #10) at the Lance Projects (A$5.6 million);
- Working capital purposes including raising costs; and
- To repay debt drawn on the Investec revolving loan facility which is currently drawn to US$3.5 million (A$4.8 million).


Interim operating strategy

In light of current uranium market conditions, the company has reviewed the operating plan at the Lance Projects and has decided to implement an interim operating strategy until uranium prices normalise.

Under the interim strategy, the Lance Projects production forecast is aligned to delivery commitments under existing term contracts, maximising the value attained for the extracted resource.

Construction activity is almost complete on header house 7, which is planned to be ready for start-up by the end of December 2016.

Peninsula will continue with the roll out of additional header houses, as construction of header houses 8 to 10 will allow flowrates across all production wells to be varied, optimising operating costs and increasing average uranium head grade.

While the company will operate in line with the modified and low cost production plan on an interim basis, at full capacity the Lance Projects development plan comprises a three stage ramp up:

- Stage 1: production rate of between 500,000 and 700,000 pounds uranium oxide;
- Stage 2: production rate of up to 1.2 million pounds uranium oxide; and
- Stage 3: production rate of up to 2.3 million pounds uranium oxide.


Analysis

The successful $8.5 million placement and planned share purchase plan places Peninsula in a sustainable position going forward with ample cash funding.

The lower operating costs combined with high value term contracts from the interim operating strategy will see Peninsula move to sustainable cash generation in the first half of 2017, a significant achievement in the current market.

While the present uranium market is challenging, Peninsula is insulated from current prices through its existing long term contracts.

By implementing a managed production ramp-up, the company is well positioned to sustain itself through the current uranium market and then to expand quickly when the market improves.

Peninsula’s largest shareholders, Resource Capital Funds and Pala have again demonstrated their commitment to the company, both through participation in the placement and improvement in the terms of the existing convertible loan facility.

Peninsula has received a vote of confidence from the market as its shares trade at a premium to the placement price.

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Thu, 08 Dec 2016 13:00:00 +1100 http://www.proactiveinvestors.com.au/companies/news/170155/peninsula-energy-raises-85m-to-continue-uranium-production-ramp-up-170155.html
<![CDATA[News - Peninsula Energy gets ready to raise ]]> http://www.proactiveinvestors.com.au/companies/news/169993/peninsula-energy-gets-ready-to-raise-169993.html Broker Numis is a fan on Peninsula, and has a target of A$1.05 per share.

The halt will remain in place until the opening of trade on Thursday 8th December 2016, or earlier if an announcement is made to the market.

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Tue, 06 Dec 2016 10:00:00 +1100 http://www.proactiveinvestors.com.au/companies/news/169993/peninsula-energy-gets-ready-to-raise-169993.html
<![CDATA[Media files - Peninsula Energy Ltd insulated from the challenging uranium price ]]> http://www.proactiveinvestors.com.au/companies/stocktube/6488/peninsula-energy-ltd-insulated-from-the-challenging-uranium-price-6488.html Tue, 29 Nov 2016 16:12:00 +1100 http://www.proactiveinvestors.com.au/companies/stocktube/6488/peninsula-energy-ltd-insulated-from-the-challenging-uranium-price-6488.html <![CDATA[News - Peninsula Energy Ltd a favoured uranium play of broker Numis ]]> http://www.proactiveinvestors.com.au/companies/news/169446/peninsula-energy-ltd-a-favoured-uranium-play-of-broker-numis-169446.html A strategy of rapid production increases and spot sales enabled the company to make tremendous market share gains, but at the expense of prices globally that have suffered due to oversupply.

But things might be changing suggests Justin Chan, an analyst at broker Numis.

 

Can the uranium price recover?

In short, the uranium price can recover and rapidly.

Spot uranium prices are currently languishing at US$18.50 from a price of over US$50 four years ago.

The Fukushima nuclear disaster in Japan is one reason but there are others.

“In our view, the current spot price reflects short term oversupply with the largest factor being the growth in Kazakh spot production,” said Chan.

"As this ends it may create a short squeeze situation as nuclear power generating utilities have increasingly relied on spot purchases to supplant contracts signed in the rush of the 2006-2009 uranium bull market.

US utilities have less than 50% of their uranium supply under contract from 2020 onward, he adds, while EU utilities will have less than 50% coverage from 2022.


Favoured uranium plays

Chan's favoured uranium miners are Berkeley Energia (ASX:BKY, LON:BKY) with a 100p target price. First production at its Salamanca open pit project in Spain is scheduled for 2018.

Canadian group NexGen Energy (TSX:NXE) with a C$4.00/share target has, in Numis’s view, the most strategically important undeveloped deposit in the uranium sector.

Peninsula Energy (ASX:PEN) with a target of A$1.05/share, meanwhile, is ramping up phase I production at the Lance ISR facility in Wyoming, U.S.

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Thu, 24 Nov 2016 13:00:00 +1100 http://www.proactiveinvestors.com.au/companies/news/169446/peninsula-energy-ltd-a-favoured-uranium-play-of-broker-numis-169446.html
<![CDATA[News - Peninsula Energy secures additional funding from major shareholders ]]> http://www.proactiveinvestors.com.au/companies/news/167407/peninsula-energy-secures-additional-funding-from-major-shareholders-167407.html Peninsula Energy Ltd (ASX:PEN) has entered into agreements with major shareholders Resource Capital Fund VI L.P. and Pala Investments Ltd to increase the Total funding from US$15 million to US$20 million under the existing convertible loans.

Peninsula said that the final binding agreement nearing completion on US$25 million revenue streaming facility.

Peninsula is producing uranium from the Lance Projects which have a mine life of at least 20 years, underpinned by 53.7 million pounds, the largest uranium ISR JORC-Code compliant resource in North America.

Uranium extraction from wellfields at the Lance Projects for the quarter ended 30 September 2016 was 54,000 pounds of uranium, an increase of 25,000 pounds of uranium over the quarter ended 30 June 2016.

Each header house experiences slightly different rates of ramp-up and Peninsula said that it is currently seeing header houses 3 and 4 taking longer to ramp-up than originally projected.

The additional funding will be used for the commissioning of the remaining Stage 1 header houses 5 to 7 as well as allowing the Company to progress Stage 2 development preparations.

Gus Simpson, managing director, commented:

"Peninsula is pleased to have secured this additional funding from our major shareholders and hopes to conclude the revenue streaming deal in the near future, which will enable the company to accelerate development activity at the Lance Projects and move to the next production phase."


Use of funds

Total proceeds from the convertible loans will be mainly used for general well field development activities at the Lance Projects, resource development drilling, final stage 2 engineering design, and for general working capital purposes.

The completed Stage 2 expansion is expected to reduce projected all-in sustaining cash costs by US$9-10 a pound.


Broker spotlight

Last month London based Numis Securities Limited initiated coverage on Peninsula.

The broker noted: "We initiate coverage with a target price of A$1.20 based on 1x our 7% NAV for Lance and 0.5x our 10% NAV for Karoo."

Peninsula last traded at $0.54 per share.

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Fri, 14 Oct 2016 10:30:00 +1100 http://www.proactiveinvestors.com.au/companies/news/167407/peninsula-energy-secures-additional-funding-from-major-shareholders-167407.html
<![CDATA[News - Peninsula Energy Ltd: Cashflow as Lance ramps up, growth from Karoo ]]> http://www.proactiveinvestors.com.au/companies/news/166113/peninsula-energy-ltd-cashflow-as-lance-ramps-up-growth-from-karoo-71087.html Peninsula Energy Ltd (ASX:PEN) has received a Buy recommendation from the London based Numis Securities Limited.

Numis initiated coverage with a A$1.20 per share price target, or around double the current valuation.

The following is an extract from the report.


Cashflow as Lance ramps up, growth from Karoo

Peninsula is a growth focused uranium miner which is ramping up production at its Lance ISR project in Wyoming, which should produce up to 2.5Mlb/year at an AISC of US$29/lb once fully developed.

PEN have remaining forward sales of 8.0Mlbs at an average price of US$56/lb, a premium to the spot price of US$26/lb, and, as a US producer, is well positioned to secure further agreements.

The company also owns the Karoo project in South Africa that hosts a high grade Resource of 56.9Mlb that should be developed into a 2.5Mlb-3Mlb mine over the medium term.

We initiate coverage with a BUY recommendation and a target price of A$1.20/share.


Ramping up Stage 1 at Lance, with 8.0 Mlb of long term deliveries secured at US$56/lb.

Peninsula commenced production at its In Situ Recovery Lance project in Wyoming in late 2015.

Stage I should hit design capacity of 600-700klb of U3O8 in H1 2017.

The development of Stages II and III of the project should increase production to 2.3Mlbs/year by 2020 and mgmt have put in place a series of long-term off-take agreements (8.0Mlbs remaining, 8.2Mlbs originally signed) at US$56/lb with European and US-based utilities.

AISC at the project should decline from US$41/lb during Stage 1 to US$29/lb once Stage 3 is developed due to greater economies of scale and vertical integration.

This should place the company in the lowest quartile on the cost curve.


Karoo should double production over the long term.

The Karoo project in South Africa has a current Resource of 56.9Mlb at 1,108ppm U3O8, however, it occurs within a far larger series of mineralised palaeochannels, which could host a far larger Resource.

In line with BEE legislation Peninsula holds a 74% interest and has entered into an agreement with DRA to complete a PFS.

We assume that Karoo enters production in CY2020 with capex of US$150 million (plus a US$45 million payment to Areva) to develop a 2.5-3Mlbpa project with AISC of US$31/lb.


Uranium pricing not sustainable at current low levels.

The spot uranium price has come under stress post-2011 due to the idling of Japanese reactors, reduced contracting, and supply increases due to underfeeding and increased Kazakh ISR production.

Notwithstanding this, the majority of natural uranium is transacted between producers and energy utilities through long term contracts whose prices are more stable than the spot price.

The current contract price of US$38/lb is above the US$26/lb spot price and we believe that contract prices will move upwards due to improving demand factors and is currently too low for producers to be willing to transact long term contracts.

We expect contracting activity and prices to increase as utilities replace the contracts and volumes signed in the 2008-2010 period.


Initiate coverage with a BUY recommendation and A$1.20 target price.

We initiate coverage with a target price of A$1.20 based on 1x our 7% NAV for Lance and 0.5x our 10% NAV for Karoo.

Over the short term we expect the shares to re-rate as Stage 1 production at Lance is completed in H1 2017, further long term supply contracts are secured and the PFS for Karoo is completed.

 

Proactive Investors is a global leader reporting financial news, media, research and hosts events for listed emerging growth companies and investors across four continents.

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Tue, 20 Sep 2016 09:30:00 +1000 http://www.proactiveinvestors.com.au/companies/news/166113/peninsula-energy-ltd-cashflow-as-lance-ramps-up-growth-from-karoo-71087.html
<![CDATA[News - Peninsula Energy Ltd's uranium production ramp-up continues at Lance ]]> http://www.proactiveinvestors.com.au/companies/news/166112/peninsula-energy-ltds-uranium-production-ramp-up-continues-at-lance-70994.html Peninsula Energy Ltd's (ASX:PEN) uranium production ramp-up is continuing on schedule at the Lance Projects in Wyoming, U.S.

Gus Simpson, managing director and CEO, commented: "The Lance Projects continue to progress as forecast, Mine Unit 2 permeability looks good and production drilling is returning consistent support for the feasibility study estimates.

"The open house saw good attendance from Crook County officials, land owners and local residents.

"The plant and header house tours were very well received."


Production ramp-up

Uranium production from Lance is now sourced primarily from header houses 1, 2 and 3.

Header house 4 remains in early ramp-up phase, with header house 5 planned to be commissioned in October, header house 6 in November and header house 7 in December.

Circa 40,000 pounds of drummed U3O8 is scheduled to be delivered to a North American conversion facility on 15 September 2016 for storage prior to delivery under existing term contracts.


Flow rates

Average flow rates from extraction wells at header houses 1, 2 and 3 continue to be consistent with projections made prior to the commencement of operations.

Stage 1 steady state production will see up to seven header houses in simultaneous operation and the current rate of ramp up at the Lance Projects continues to support the targeted Stage 1 production levels.


High-grade uranium intercepts

During the period from June 2016 to present, Strata completed over 250 mining wells within MU2.

The mining wells are primarily for header houses 5, 6 and 7.

The well installation drilling has also intersected strong uranium mineralisation, testing the extent of the known ore zone and to date the results are in line with resource grade expectations for the ore body, a positive result ahead of the commencement of production and extraction of uranium from this mining zone.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX emerging companies with distribution in Australia, UK, North America and Hong Kong / China.

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Tue, 13 Sep 2016 11:00:00 +1000 http://www.proactiveinvestors.com.au/companies/news/166112/peninsula-energy-ltds-uranium-production-ramp-up-continues-at-lance-70994.html
<![CDATA[News - Peninsula Energy Ltd provides roadmap to NYSE MKT listing ]]> http://www.proactiveinvestors.com.au/companies/news/165188/peninsula-energy-ltd-provides-roadmap-to-nyse-mkt-listing-70357.html Peninsula Energy Ltd (ASX:PEN) has appointed Roth Capital Partners LLC to support the company’s plan to dual list on the New York Stock Exchange (NYSE).

Listing on the NYSE exposes Peninsula’s U.S. based producing uranium projects to the world’s largest capital market and institutional fund managers.

The NYSE listing is subject to the registration statement on Form 20-F being declared effective by the Securities and Exchange Commission and final clearance from the NYSE.

Peninsula is aiming to complete the NYSE listing process in the second half of 2016.


Background

Peninsula’s plan is to be a uranium producer with multiple sources of supply in established mining economies with low cost, long life mines.

Peninsula’s primary focus is ramping up production at its uranium Lance Projects located in the U.S. state of Wyoming.

The company also has a 74% interest in the 7,800 square kilometres located in South Africa, the Karoo Projects.

Peninsula also intends to acquire one of several projects it has identified in Australia or Canada.


Lance Projects

Effective production at the Lance Projects commenced in March 2016 with construction completed on-schedule and on-budget.

The Lance Projects have a 3 stage production profile building to 2.3 million pounds of uranium per annum by 2020, which is when Stage 3 plans to begin.

Stage 1 is on track and aims to produce 700,000 pounds of uranium by H1 2017 through 7 header houses.

The current JORC-2012 compliant resource is 53.7 million pounds of uranium with expansion potential to create over 70 years of mine life.

The project has strong economics with an internal rate of return (IRR) of 36% and average cash cost of US$29.16 per pound.

The Lance Projects’ all-in sustaining cash cost (AISC) will reduce from $41 to $31-32 per pound as the project enters Stage 2 during the second half of 2017.


Stage 2 financing

Peninsula continues to work on a funding package for the company’s Stage 2 expansion and has been progressing negotiations on a revenue streaming facility as the primary component of this package.

Revenue streaming is a non-dilutive mechanism that sees a proportion of future sales revenue being exchanged for a one-off upfront cash payment that is to be used for development or expansion capital expenditure.

The proportion of future sales revenue only applies for a finite time period and finite quantity of annual production.

Technical and commercial due diligence has now been completed by the funding party, and Peninsula and this party are working together to finalise a binding agreement in the near term.


Karoo Projects financing

Peninsula see the Karoo Projects as their second production centre as per their long term strategy to create multiple sources of supply.

Karoo has a JORC compliant resource of 23.3 million tonnes grading 1,108ppm for 56.9 million pounds of uranium.

Peninsula has recently entered into a subscription agreement with Concentrate Capital Partners Limited (CCP), an independent investment partner to DRA Global.

Peninsula will issue 976,696 shares to CCP at an issue price of $0.80 upon receipt of invoice from DRA Projects SA (DRA), and CCP will assume full responsibility for payment to DRA for services provided under the Pre-Feasibility Study (PFS).

This agreement also contains an option for CCP to fund post-PFS activities using the same mechanism.

Post-PFS activities include the Bankable Feasibility Study, reserve drilling and other related activities.


Broker spotlight

Peninsula has drawn research coverage from five investment banks and research houses, with recently published reports including:

Rodman & Renshaw Research: Buy rating – A$2.25 price target
BMO Capital Markets: Outperform rating – A$1.00 price target
Dundee Capital Markets: Buy rating - A$1.50 price target
Patersons Securities: Speculative Buy rating – A$1.20 price target

These price targets represent significant upside from the current share price of A$0.62.

 

Proactive Investors is a global leader reporting financial news, media, research and hosts events for listed emerging growth companies and investors across four continents.

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Wed, 10 Aug 2016 13:00:00 +1000 http://www.proactiveinvestors.com.au/companies/news/165188/peninsula-energy-ltd-provides-roadmap-to-nyse-mkt-listing-70357.html
<![CDATA[News - Peninsula Energy: Cash management important as Lance production ramps ]]> http://www.proactiveinvestors.com.au/companies/news/165187/peninsula-energy-cash-management-important-as-lance-production-ramps-70293.html Peninsula Energy Ltd (ASX:PEN) has received a Buy Recommendation from broker Dundee Capital Markets, with a $1.50 target.

Peninsula last traded at $0.65. The following is an extract from the report.


Cash Management Important as Lance Production Ramps

We recommend Peninsula as a BUY, but reduce our share target to A$1.50 from A$1.80/sh on deferred production for FY16 and FY17.

We apply a 0.9x multiple to our 10% DCF model. We also upgrade our risk rating to High from Speculative, given that production rates at Lance have begun to accelerate.

We watch Peninsula's cash balance as Stage 2 capital spend nears; particularly as early stage mine costs are higher, and U3O8 deliveries are fewer, smaller and sporadic. Uranium prices are less of an issue due to an extensive suite of industry leading high priced contracts.

Though sales of 105,000 lbs were made over the past two quarters, most of this material was sourced from purchases on the spot market.

Nevertheless, an exceptional production growth profile in the US coupled with a high-priced contract portfolio makes Peninsula one of our top defensive picks in the sector, provided that ramp-up continues as scheduled.

PEN trades at a P/NAV of 0.39x versus developers at 0.33x, producers at 0.38x.


Q4/16 production, sales pre-released.

Production was 29,000 lbs, and deliveries were 55,000 lbs at US$62.80/lb with cash received post-Q.

Production was sourced from Header Houses 1 and 2, now producing at 105% of target. Flow rates have also achieved targets at 18-20 gpm, and combined head grade now exceed the LOM average of 38 mg/L. We are impressed with the 130% premium over average spot.

This contract book is one of the best in the sector. It has 8.1 MM lbs sold forward at an average of US$55/lb U3O8 for the next ten years. Expect further off-takes to cover Stage 2 and Stage 3 production.


Production step change in July.

Header houses 3 and 4 have helped increase production by ~70%, post quarter, and 16,800 lbs was produced by July 27th.

There are no bottlenecks in the plant. This suggests an annual run rate of 228,000 lbs, which is roughly 1/3 of scheduled Stage 1 capacity. Stage 1 production guidance previously moved back.

We now expect 200,000 to 300,000 lbs in CY16, and a run rate of 600,000 to 700,000 lbs by CY17.


Cash management is important.

Cash is somewhat hand to mouth. We also expect lag time between production, deliveries and payment.

Including recent payments we estimate US$10.4 MM cash on hand, with plans to spend US$8.3 MM in FQ1/17. US$11.5 MM is available from a US$30 MM facility.

A $25 MM Revenue Streaming facility is nearing completion to help fund $35 MM Stage 2 Capex. Due diligence is completed and the agreement is being finalized.


Stage 2 development set to begin.

Initial development has started. This would be another step change, doubling production capacity to 1.2 MM lbs pa, bringing final processing in house.

Significant cost savings are expected, with total cash costs due to drop from US$41/lb U3O8 to US$31 to 32/lb.


NYSE listing now expected H2/16.

This should improve liquidity and provide access to new capital. Management believes the main issues are covered, namely using resources, not reserves, for qualifying technical studies.

It has also moved to US$ reporting which should help reduce A$:US$ FX sensitivity.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX emerging companies with distribution in Australia, UK, North America and Hong Kong / China.

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Mon, 08 Aug 2016 08:40:00 +1000 http://www.proactiveinvestors.com.au/companies/news/165187/peninsula-energy-cash-management-important-as-lance-production-ramps-70293.html
<![CDATA[News - Peninsula Energy Ltd enters agreement to advance Karoo Uranium ]]> http://www.proactiveinvestors.com.au/companies/news/165186/peninsula-energy-ltd-enters-agreement-to-advance-karoo-uranium-70257.html Peninsula Energy Ltd (ASX:PEN) has entered a partnership to advance its Karoo uranium projects in South Africa, (Peninsula 74% / BEE Groups 26%).

Peninsula has entered into a subscription agreement with Concentrate Capital Partners Limited (CCP), an independent investment partner to DRA Global.

Peninsula will issue 976,696 shares to CCP at an issue price of $0.80 upon receipt of invoice from DRA Projects SA (DRA), and CCP will assume full responsibility for payment to DRA for services provided under the Pre-Feasibility Study (PFS).

This agreement also contains an option for CCP to fund post-PFS activities using the same mechanism.

Post-PFS activities include the Bankable Feasibility Study, reserve drilling and other related activities.

John Simpson, managing director and CEO, commented: “The company is confident this work will provide us with clear parameters for the future development at the Karoo Projects.

"We are pleased to partner with DRA and Concentrate Capital Partners in moving the Karoo Projects toward production."

Peninsula has previously appointed DRA to complete the preliminary mining and process engineering and enhanced metallurgical test work to support the PFS at the Karoo Projects in South Africa.

The PFS follows a preliminary technical and economic assessment concluded by DRA in late 2013 and additional metallurgical test work conducted during 2014-2016.

The current metallurgical testing is primarily aimed at establishing the economic benefits of carbonate removal ahead of leaching along with confirmatory hydrometallurgical test work.

Pending the outcome of this test work phase, the PFS process design will consider the incorporation of a carbonate rejection step ahead of leaching to optimise the process flow sheet and minimise operating costs.

The PFS will also include preliminary mine design and layout (both open pit and underground), all engineering works associated with the proposed mine, plant tailings storage facility and inplant infrastructure.


Broker spotlight

- Rodman & Renshaw Research: Buy rating and A$2.25 price target.
- BMO Capital Markets: Outperform rating and A$1.00 price target.
- Dundee Capital Markets: Buy rating and A$1.80 price target.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX emerging companies with distribution in Australia, UK, North America and Hong Kong / China.

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Thu, 04 Aug 2016 16:30:00 +1000 http://www.proactiveinvestors.com.au/companies/news/165186/peninsula-energy-ltd-enters-agreement-to-advance-karoo-uranium-70257.html
<![CDATA[News - Peninsula Energy Ltd: Uranium production trending up ]]> http://www.proactiveinvestors.com.au/companies/news/160724/peninsula-energy-ltd-uranium-production-trending-up-70212.html Peninsula Energy Ltd (ASX:PEN) has received a Speculative Buy and $1.20 target price from Perth broker Patersons.

Peninsula last traded at $0.69. The following is an extract from the report.


URANIUM PRODUCTION TRENDING UP

Investment Highlights

Peninsula Energy (PEN) is in the process of ramping up uranium production at its Lance In-Situ Recovery (ISR) project in Wyoming.

Significantly, since commencing production, grades have continued their upward trajectory which should allow the operation to reach Stage 1 production levels during 1H/CY17.

Importantly, PEN expects to finalise funding for Stage 2 production over the next quarter, which is expected to bring costs down towards US$30/lb.

We see PEN’s key advantage over other uranium producers is that it has secured several long term uranium contracts with fixed pricing close to US$60/lb that is significantly above the current spot price (cUS$26/lb).

We see a number of short term catalysts that could positively impact the stock including a NYSE MKT listing and further developments at its Karoo project in South Africa.

We rate PEN a Speculative Buy with a price target of $1.20/sh.


Uranium Production Ramping-Up:

PEN recently provided an update on its operations which demonstrated that uranium production is moving in the right direction. Since commencing production at the end of last year, uranium grades are gradually increasing and are currently in the 35-40mg/l range. They are expected to peak at around 40-45mg/l over the next half.

This should allow Stage 1 production levels of 500-700klbpa U3O8 to be achieved.

For July, uranium production has effectively reached an annualised rate of 230,000lbpa with production continuing to ramp-up with contributions from Header Houses 3 & 4.


Significant Long Term Uranium Contracts:

In our opinion, PEN’s biggest advantage over its peers is that it has secured five long-term uranium contracts.

In total, PEN has 8.1Mlb contracted at a weighted average price of US$55/lb over the next 10 years.

This demonstrates that the PEN management team has significant relationships with the end-users.

Four of these contracts are with US utilities and one with a large European utility.

We expect PEN to continue to build these relationships with one more contract expected to be concluded over the next 2-3 months to further de-risk Stage 1 production.


Valuation $1.20/sh:

Our valuation for PEN has decreased to $1.20/sh (from $1.90/sh). The key driver has been revisions to our uranium price forecasts.

We have incorporated the US$15m convertible note and have also made some minor adjustments to the production ramp-up which has been delayed due to a significant loss of drilling days during the 2015/6 winter and delays in obtaining the initial production permits.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX emerging companies with distribution in Australia, UK, North America and Hong Kong / China.

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Wed, 03 Aug 2016 11:00:00 +1000 http://www.proactiveinvestors.com.au/companies/news/160724/peninsula-energy-ltd-uranium-production-trending-up-70212.html
<![CDATA[News - Peninsula Energy Ltd: Rodman & Renshaw reiterates A$2.25 price target ]]> http://www.proactiveinvestors.com.au/companies/news/160723/peninsula-energy-ltd-rodman-renshaw-reiterates-a225-price-target-70175.html Peninsula Energy Ltd (ASX:PEN) has received a Buy recommendation from Rodman & Renshaw, who have reiterated their A$2.25 price target.

Peninsula last traded at $0.69. The following is an extract from the report.


Rodman & Renshaw / PEN-AU: Stage 2 Development On-Deck; Reiterating Buy


On July 29, 2016, Peninsula Energy announced 2Q16 financial results.

During the quarter, Peninsula produced 28,858 pounds of uranium at the Lance Projects, primarily from header houses 1 and 2.

Although header houses 3 and 4 are currently operating, they did not come online until July, which leads us to believe Peninsula can increase QoQ production in 3Q16.

Overall, the firm sold a total of 55,000 pounds of uranium at an average price of $62.80 per pound—significantly above the current spot price of below $30.00 per pound.

Given the current ramp up of production at Lance, we think a 600,000 - 700,000 pound per annum run rate should be achievable by 1H17.

Eventually, Stage 1 at Lance is expected to host seven header houses that should all be online by the end of 2016.


Development of Stage 2 expected.

While the ramp up of Stage 1 continues to move forward as expected, Peninsula has begun initial development activities for Stage 2 of the project, while final financing arrangements are ironed out.

The funding package for the expansion remains underway as the due diligence process proceeds with respect to securing a revenue streaming facility.

While the terms of the envisioned financing package have yet to be released, we think this non-dilutive financing should provide approximately $25.0 million towards the total capital cost of Stage 2, which we estimate to be approximately $35.0 million.

We view the development of Stage 2 as critical, since the expansion expected to increase production capacity to 1.2 million pound per annum while also reducing costs substantially to approximately $30 per pound on an AISC basis.


Long-term contracts allow for profitability.

Given that Peninsula currently has five long-term contracts totaling 7.9 million pounds at an average price of $56 per pound, we believe substantial margins should be realized despite a floundering uranium spot market.

With AISC expected to drop to the $30 per pound range following the Stage 2 expansion, we expect Peninsula to enjoy margins of approximately 45%-a luxury in today’s uranium market.

While we expect Stage 2 to be constructed by 2018, we continue to believe flexibility with respect to this timeline remains.

While we do not view the scenario as likely, should spot uranium stay below the firm’s AISC of production, management could choose to purchase uranium at spot and sell it into its higher-priced long-term contracts rather than moving forward with the expansion.

While we fully expect the Stage 2 expansion to occur, this potential provides management with greater flexibility to tailor operations depending on market conditions.

We are reiterating a Buy rating and $2.25 per share price target on Peninsula Energy.

Our valuation remains predicated on a DCF of operations at Lance utilizing a 10% discount rate, which we expect to revisit following the completion of the Stage 2 expansion.

We continue to view Peninsula as a defensive uranium name, primarily due to the existence of higher-priced long-term contracts.

In our opinion, these contracts should allow Peninsula to not only survive, but thrive in the current uranium price environment.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX emerging companies with distribution in Australia, UK, North America and Hong Kong / China.

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Tue, 02 Aug 2016 08:20:00 +1000 http://www.proactiveinvestors.com.au/companies/news/160723/peninsula-energy-ltd-rodman-renshaw-reiterates-a225-price-target-70175.html
<![CDATA[News - Peninsula Energy Ltd powers towards NYSE MKT Listing ]]> http://www.proactiveinvestors.com.au/companies/news/160722/peninsula-energy-ltd-powers-towards-nyse-mkt-listing-69903.html Peninsula Energy Ltd (ASX:PEN) is progressing in its current process to dual list on the New York Stock Exchange (NYSE).

Listing on the NYSE exposes Peninsula’s U.S. based producing uranium projects to the world’s largest capital market and institutional fund managers.

The company believes it has cleared the key outstanding items received to date and is awaiting its Form 20-F to be declared effective by the SEC.

Subject to Form 20-F being declared effective and final clearances from the NYSE, Peninsula aims to complete the listing process in 2H 2016.


Background

Peninsula’s plan is to be a uranium producer with multiple sources of supply in established mining economies with low cost, long life mines.

Peninsula’s primary focus is ramping up production at its uranium Lance Projects located in the U.S. state of Wyoming.

The company also has a 74% interest in the 7,800 square kilometres located in South Africa, the Karoo Projects.

Peninsula also intends to acquire one of several projects it has identified in Australia or Canada.


Lance Projects

Effective production at the Lance Projects commenced in March 2016 with construction completed on-schedule and on-budget.

The Lance Projects have a 3 stage production profile building to 2.3 million pounds of uranium per annum by 2020, which is when Stage 3 plans to begin.

Stage 1 is on track and aims to produce 700,000 pounds of uranium by H1 2017 through 7 header houses.

The current JORC-2012 compliant resource is 53.7 million pounds of uranium with expansion potential to create over 70 years of mine life.

The project has strong economics with an internal rate of return (IRR) of 36% and average cash cost of US$29.16 per pound.

The Lance Projects’ all-in sustaining cash cost (AISC) will reduce from $41 to $31-32 per pound as the project enters Stage 2 during the second half of 2017.


Stage 2 financing

Peninsula continues to work on a funding package for the company’s Stage 2 expansion and has been progressing negotiations on a revenue streaming facility as the primary component of this package.

Revenue streaming is a non-dilutive mechanism that sees a proportion of future sales revenue being exchanged for a one-off upfront cash payment that is to be used for development or expansion capital expenditure.

The proportion of future sales revenue only applies for a finite time period and finite quantity of annual production.

Technical and commercial due diligence has now been completed by the funding party, and Peninsula and this party are working together to finalise a binding agreement in the near term.


Karoo Projects financing

Peninsula see the Karoo Projects as their second production centre as per their long term strategy to create multiple sources of supply.

Karoo has a JORC compliant resource of 23.3 million tonnes grading 1,108ppm for 56.9 million pounds of uranium.

Peninsula has been negotiating with a number of parties to secure a strategic investment partner to accelerate the project through the completion of feasibility studies.

At this stage legal and technical due diligence has been completed by two groups, one of whom has put forward a proposal with the other expected to lodge a proposal shortly.

The company is also continuing negotiations with a third party who previously submitted a term sheet, which is subject to ongoing finalisation of investment structure and due diligence.


Broker spotlight

Peninsula has drawn research coverage from five investment banks and research houses, with recently published reports including:

Rodman & Renshaw Research: Buy rating – A$2.25 price target
BMO Capital Markets: Outperform rating – A$1.00 price target
Dundee Capital Markets: Buy rating - A$1.80 price target

These price targets represent significant upside from the current share price of A$0.69.



Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX emerging companies with distribution in Australia, UK, North America and Hong Kong / China.

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Tue, 19 Jul 2016 15:00:00 +1000 http://www.proactiveinvestors.com.au/companies/news/160722/peninsula-energy-ltd-powers-towards-nyse-mkt-listing-69903.html
<![CDATA[News - Peninsula Energy Ltd continues to accelerate uranium production at Lance Projects ]]> http://www.proactiveinvestors.com.au/companies/news/160721/peninsula-energy-ltd-continues-to-accelerate-uranium-production-at-lance-projects-69760.html Peninsula Energy Ltd (ASX:PEN) continues with the ramp up of uranium production from its Lance Projects located in the U.S. state of Wyoming.

During the June quarter, 29,000 pounds of uranium was produced.

The rate of production continues to accelerate with 7,000 pounds of uranium produced in the first 10 days of July alone.

The current rate of ramp up at the Lance Projects supports the targeted Stage 1 production level of 600,000 to 700,000 pounds per annum in the first half of 2017.

Gus Simpson, managing director, commented: “The last 5 weeks have seen the rate of uranium production increase dramatically and augurs well for the Lance Projects to meet the expectations of the company going forward”.


June quarter

During the June quarter, 28,858 pounds of uranium were extracted from the Lance Projects, an increase of almost 20,000 pounds over the March quarter.

A 7-day plant outage adversely impacted June production by an estimated 3,000 pounds.

June production was primarily from header houses 1 and 2.

Header houses 3 and 4 were commissioned during the June quarter - meaningful quantities of uranium from both header houses commenced during July.

Header houses 1 and 2 are now producing uranium at 105% of steady state target rates.

55,000 pounds of uranium was delivered during the June quarter under existing long term uranium concentrate sale and purchase agreements at an average realised price of US$62.80 per pound.

Uranium for these deliveries was purchased on-market.


Lance Projects

Effective production at the Lance Projects commenced in March 2016 with construction completed on-schedule and on-budget.

The Lance Projects have a 3 stage production profile building to 2.3 million pounds of uranium per annum by 2020, which is when Stage 3 plans to begin.

Stage 1 is on track and aims to produce 700,000 pounds of uranium by H1 2017 through 7 header houses.

The current JORC-2012 compliant resource is 53.7 million pounds of uranium with expansion potential to create over 70 years of mine life.

The project has strong economics with an internal rate of return (IRR) of 36% and average cash cost of US$29.16 per pound.

The Lance Projects’ all-in sustaining cash cost (AISC) will reduce from $41 to $31-32 per pound as the project enters Stage 2 during the second half of 2017.


Analysis

A strong June quarter and evidence of a stronger September quarter shows that Peninsula is well placed to deliver on its production expansion strategy at the Lance Projects.

The company has a low risk, clear path to production expansion with an estimated US$17.50 per pound margin over all-in costs at the project’s Stage 2 steady state.

Projected revenue under existing long term contracts at Lance is an estimated US$445 million

Peninsula is leveraged to further upside at Lance through production growth, exploration and the uranium price.

Peninsula maintains strong financial support from the strong institutional shareholder base, which includes Resource Capital Funds, Pala Investments and BlackRock Funds.

Tightening supply and increasing demand is expected to support a growing uranium sector.

Peninsula has drawn research coverage from five investment banks and research houses, with recently published reports including:

Rodman & Renshaw Research: Buy rating – A$2.25 price target
BMO Capital Markets: Outperform rating – A$1.00 price target
Dundee Capital Markets: Buy rating - $1.80 price target

These price targets represent significant upside from the current share price of A$0.65.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX emerging companies with distribution in Australia, UK, North America and Hong Kong / China.

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Tue, 12 Jul 2016 13:00:00 +1000 http://www.proactiveinvestors.com.au/companies/news/160721/peninsula-energy-ltd-continues-to-accelerate-uranium-production-at-lance-projects-69760.html
<![CDATA[News - Peninsula Energy Ltd: HC Wainwright reiterates Buy Recommendation ]]> http://www.proactiveinvestors.com.au/companies/news/160720/peninsula-energy-ltd-hc-wainwright-reiterates-buy-recommendation-69688.html Peninsula Energy Ltd (ASX:PEN) has attracted a A$2.25 price target from Rodman & Renshaw, a subsidiary of H.C. Wainwright & Co.

The broker has reiterated its Buy Recommendation. Peninsula last traded at A$0.55 per share. The following is an extract from the report.


Fifth Long-Term Contract Provides Price Stability


Production at Lance starting to ramp-up.

Since commencing production at the Lance Projects in December 2015, three of the seven header houses envisioned for Stage 1 have come online as management continues to ramp towards full-scale production.

We expect the remaining header houses to come online during 2H16, which will complete Stage 1 of the production ramp-up.

We expect the completion of Stage 1 to provide the firm with production capabilities totaling 600,000 - 800,000 pounds per year, which we think should serve as a springboard towards completion of Stage 2.

The $35 million Stage 2 expansion, which includes an additional seven header houses, is expected to bring total production capacity to 1.2 million pounds per annum.

Moreover, while the firm has yet to provide production guidance for 2016, we continue to expect approximately 300,000 pounds of production and expect to receive greater visibility with respect to production once results from CY2Q16 are announced.


Funding for Stage 2 expansion ongoing.

During the first quarter, Peninsula announced the closing of a $15.0 million convertible loan with existing investors (RCF and Pala) in addition to a term sheet for a $25 million streaming facility.

Combined, these funds should allow the company to complete the approximate $35 million Stage 2 expansion at Lance.

While the streaming facility has yet to close, due diligence is well underway and we expect this facility to provide a portion of the capital required to complete the Stage 2 expansion.

Not only is the Stage 2 expansion expected to increase production capacity to 1.2 million pounds per annum, it should also drastically reduce operating costs.

The expansion should bring processing in-house, rather than through a toll milling agreement.

This, coupled with the realization of economies of scale, leads us to believe all-in sustaining costs (AISC) could fall from $41 per pound to just over $30 per pound—a greater than 25% decrease in costs at the site.


Long-term contracts to provide price stability.

With the addition of another long-term sales agreement with a European utility company, Peninsula now has five contracts in place totaling 7.9 million pounds over the next decade.

We highlight the average price of $56 per pound under these contracts, which is significantly higher than current spot prices of around $27 per pound.

In short, we continue to believe Peninsula’s higher-priced contracts should provide investors with downside protection with respect to spot uranium prices, while the firm's staged development strategy provides upside through an increased production profile.


We are reiterating our Buy rating, while modestly lowering out PT to A$2.25 from A$2.60.

We note that our slightly decreased price target is primarily a reflection of accounting for the firm’s recent capital raise below our prior valuation.

Our valuation remains predicated on a DCF of operations at Lance utilizing a 10% discount rate, which we expect to revisit following additional long-term production
details from Peninsula.

We continue to view Peninsula as a defensive uranium name, primarily due to the existence of higher-priced longterm contracts.

In our opinion, these contracts ultimately should allow Peninsula to not only survive, but thrive in the current uranium price environment.

Risks.

1) Financing risk;
2) uranium price risk;
3) operating and technical risk; and
4) political risk.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX emerging companies with distribution in Australia, UK, North America and Hong Kong / China.

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Fri, 08 Jul 2016 09:00:00 +1000 http://www.proactiveinvestors.com.au/companies/news/160720/peninsula-energy-ltd-hc-wainwright-reiterates-buy-recommendation-69688.html
<![CDATA[News - Peninsula Energy Ltd: U.S. Nuclear Regulatory Commission rules in favour ]]> http://www.proactiveinvestors.com.au/companies/news/160719/peninsula-energy-ltd-us-nuclear-regulatory-commission-rules-in-favour-69607.html Peninsula Energy Ltd (ASX:PEN) has advised that the Commissioners of the United States Nuclear Regulatory Commission (NRC) have ruled in favour of the company and denied a petition to appeal by the Natural Resources Defence Council and the Powder River Basin Resource Council (together, the Joint Intervenors).

The Joint Intervenors petitioned to appeal against the Atomic Safety and Licensing Board’s (ASLB) previous dismissal of all remaining environmental contentions (EC) brought against the Lance Projects Central Processing Plant and Ross Project Area in Wyoming U.S.

Gus Simpson, managing director and chief executive officer for Peninsula, commented:

"The company is pleased that the Commissioners deliberation of the facts support the findings of the comprehensive studies completed by the company and the reviews of these conducted by multiple government agencies."


Details

In its January 2015 ruling the ASLB determined that the contentions raised by the Joint Intervenors were unable to be substantiated by the evidence presented.

In denying the petition to appeal the previous dismissal, the NRC Commissioners have reiterated that the Joint Intervenors are unable to substantiate the claims upon which the contentions are based.

Contentions raised by the Joint Intervenors were originally heard by the ASLB between 28 September 2014 and 1 October 2014.

The issues under consideration at the time were whether the final Supplemental Environmental Impact Statement (SEIS) issued by the NRC failed to or inadequately addressed certain aspects of groundwater conditions.

The NRC Commissioners found that the SEIS did address groundwater conditions adequately and have now dismissed the petition to appeal.


Uranium production

In June 2016 Peninsula delivered its first drummed uranium from the Lance Projects in the U.S. state of Wyoming.

The first shipment delivered to the conversion facility contained 16,000 pounds of uranium.

Revenue of US$120 million is forecast from delivery commitments of 2.15 million pounds of U3O8 over the next 5 years alone.


Production ramp up

Lance expects to achieve targeted Stage 1 production of 600,000-700,000 pounds of uranium in 1H 2017.

Production to date indicates 200,000-300,000 pounds of uranium will be produced for 2016.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX emerging companies with distribution in Australia, UK, North America and Hong Kong / China.

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Mon, 04 Jul 2016 14:00:00 +1000 http://www.proactiveinvestors.com.au/companies/news/160719/peninsula-energy-ltd-us-nuclear-regulatory-commission-rules-in-favour-69607.html
<![CDATA[News - Peninsula Energy Ltd delivers first uranium as Lance ramp up continues ]]> http://www.proactiveinvestors.com.au/companies/news/160718/peninsula-energy-ltd-delivers-first-uranium-as-lance-ramp-up-continues-69020.html Peninsula Energy Ltd (ASX:PEN) has delivered its first drummed uranium from the Lance Projects in the U.S. state of Wyoming.

The first shipment delivered to the conversion facility contained 16,000 pounds of uranium.

Shipments are expected to continue regularly going forward as the production ramp up continues.

The fourth header house, used in the mining of uranium, is coming online in early June, 2016.

Revenue of US$120 million is forecast from delivery commitments of 2.15 million pounds of U3O8 over the next 5 years alone.

 
Production ramp up

Lance expects to achieve targeted Stage 1 production of 600,000-700,000 pounds of uranium in 1H 2017.

Production to date indicates 200,000-300,000 pounds of uranium will be produced for 2016.

The company expects the fourth header house online in June, the fifth header house online in the September quarter and the remaining two header houses by the end of 2016.


Recent capital raising

During April, Peninsula raised $15 million in funding from its major shareholders, Resource Capital Fund and Pala Investments Ltd.

Funding is to drive expansion and reduce future cash costs by US$9-10 a pound at Lance.

In addition, it has a term sheet in hand for a streaming financing facility for US$25 million for Stage 2 expansion at Lance that is signed and due diligence is at an advanced stage.


Analysis

The first delivery of drummed uranium is a positive sign in the ongoing development of production at the Lance Projects.

Peninsula has contracted 75% of Stage 1 production at an average price of US$56 per pound, which reduces downside risk.

The Stage 2 expansion of the Lance Projects is forecast to reduce all-in sustaining cash costs from US$41 per pound to US$31-32 per pound.

Peninsula is leveraged to further upside at Lance through production growth, exploration and the uranium price.

Projected revenue under existing long term contracts at Lance is an estimated US$440 million.

The strong support from major shareholders RCF and Pala is indicative of the future growth ahead in earnings through Stage 2.

The Lance Projects have a minimum mine life of at least 20 years, underpinned by 53.7 million pounds, the largest uranium ISR JORC-Code compliant resource in North America.

The recent capital raising will fund general well field development activities at the Lance Projects, resource development drilling, final stage 2 engineering design, feasibility studies at the Karoo Projects in South Africa and for general working capital purposes.

Peninsula was recently ascribed a price target of A$1.00 as part of an initiation report by broker BMO Capital Markets. Peninsula shares are currently trading at $0.60.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX emerging companies with distribution in Australia, UK, North America and Hong Kong / China.

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Fri, 03 Jun 2016 10:30:00 +1000 http://www.proactiveinvestors.com.au/companies/news/160718/peninsula-energy-ltd-delivers-first-uranium-as-lance-ramp-up-continues-69020.html
<![CDATA[News - Peninsula Energy Ltd is BM Capital Markets top uranium pick ]]> http://www.proactiveinvestors.com.au/companies/news/160717/peninsula-energy-ltd-is-bm-capital-markets-top-uranium-pick-68703.html Peninsula Energy Ltd (ASX:PEN) has been ranked as BM Capital Markets top uranium pick.

The following is an extract from a research report.


How to Bake a Yellow Cake

Peninsula (Top Pick) rated Outperform (Speculative); Target Price A$1.00.

Its favourably priced contract book brings with it protection from lower near-term spot uranium prices, with production growth in stages offering the main catalyst, together with attractive trading multiples.

Peninsula offers production growth, which should drive higher trading multiples, backed up by its favourable sales contracts, as well as attractive exploration upside, which is not fully reflected in its share price.


Key Pros and Cons

+ In production and ramping up to Stage 1 of 500–700klbpa U3O8 permitted to 3Mlbpa, but plans currently to Stage 3 of 2.3Mlbpa.

+ In situ leach mining has a relatively low environmental impact. Staged expansions allow market flexibility. Technically competent management.

+ Well contracted production at an average price of US$56/lb covering 75% of the first stage of production, reducing downside risk.

+ Could be a regional consolidator.

+ Comps well on EV/EBITDA and P/E multiples.

− Higher-cost operation in initial phases, but costs more than covered by uranium contract price. Mid costs longer-term.

− Limited scalability, beyond 2.3Mlbpa U3O8 Stage 3 target at this point without further wellfields.

− Funding for Stage 2 expansion contingent on conversion of convertible bond and streaming agreement/additional debt.


Protect Margins Though Contracting

Focus on companies with favourable contracts: Much of the world’s uranium supply is contracted between the supplier and utility in advance of delivery, which insulates producers to some degree from fluctuations of the spot price and protects profit margins if higher than spot.

The upside: Margins for the well-contracted companies are relatively well protected, particularly given >50% of the global total cost curve is currently under water at spot price of US$28/lb U3O8.

On this basis, Peninsula and Cameco score the best, with both companies generating attractive multiples even in the lower price environment.

For this reason, both companies are lower-risk investments than non-contracted companies.


Target Price Methodology

Our target price of A$1.00 for Peninsula reflects a 75/25 blend of P/NPV (long term – 0.9x) and 2017E EV/EBITDA (short term – 9x) multiples.

We estimate that Peninsula is likely to receive the highest uranium price out of the producers under our coverage, remaining at ~US$50/lb or more on our forecast.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX emerging companies with distribution in Australia, UK, North America and Hong Kong / China.

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Thu, 19 May 2016 09:30:00 +1000 http://www.proactiveinvestors.com.au/companies/news/160717/peninsula-energy-ltd-is-bm-capital-markets-top-uranium-pick-68703.html
<![CDATA[News - Peninsula Energy Ltd's chairman John Harrison buys shares on-market ]]> http://www.proactiveinvestors.com.au/companies/news/160716/peninsula-energy-ltds-chairman-john-harrison-buys-shares-on-market-68424.html Peninsula Energy Ltd's (ASX:PEN) non-executive chairman, John Harrison, has bought 20,000 shares on market for $15,675, which is an average entry price of around $0.78.

Harrison has a wealth of experience and resource sector knowledge acquired over a 45 year career, including 20 years of investment banking in London.

He has developed an extensive international contact base advising companies across a range of commodities, including uranium, and raising more than £500 million in equity capital in the process.

Peninsula is currently producing uranium from the Lance Projects in Wyoming, U.S.

Recently the company raised $15 million in funding from its major shareholders, Resource Capital Fund (RCF) and Pala Investments Ltd, to drive expansion and reduce future cash costs by US$9-10 a pound.

Under these agreements, RCF VI and Pala have each provided Peninsula with a convertible loan facility, with participation in proportion to their existing shareholdings in the company.

Resource Capital Fund VI has a stake of 21.6% and Pala Investments a 12.2% shareholding in Peninsula, respectively.

 

Proactive Investors is a global leader reporting financial news, media, research and hosts events for listed emerging growth companies and investors across four continents.

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Wed, 04 May 2016 11:00:00 +1000 http://www.proactiveinvestors.com.au/companies/news/160716/peninsula-energy-ltds-chairman-john-harrison-buys-shares-on-market-68424.html
<![CDATA[News - Peninsula Energy Ltd funding to drive Lance uranium project expansion ]]> http://www.proactiveinvestors.com.au/companies/news/160715/peninsula-energy-ltd-funding-to-drive-lance-uranium-project-expansion-68267.html Peninsula Energy Ltd (ASX:PEN) has raised $15 million in funding from its major shareholders, Resource Capital Fund and Pala Investments Ltd to drive expansion and reduce future cash costs by US$9-10 a pound at its producing Lance uranium projects in Wyoming.

In addition, it has a term sheet in hand for a streaming financing facility for US$25 million for Stage 2 expansion at Lance that is signed and due diligence is at an advanced stage.

The Lance Projects development plan envisages a three stage ramp-up strategy:

- Stage 1 – production rate of between 500,000 and 700,000 lbs U3O8 per annum;
- Stage 2 – production rate of 1,200,000 lbs U3O8 per annum; and
- Stage 3 – production rate of 2,300,000 lbs U3O8 per annum.

With these announcements today, Peninsula shares are out of a suspension on the ASX.

Funds raised will be used for general well field development activities at the Lance Projects, resource development drilling, final stage 2 engineering design, feasibility studies at the Karoo Projects in South Africa and for general working capital purposes.


Convertible loan agreements

Under these agreements, RCF VI and Pala (Lenders) have each provided Peninsula with a convertible loan facility, with participation in proportion to their existing shareholdings in the company.

Resource Capital Fund VI has a stake of 21.6% and Pala Investments a 12.2% shareholding in Peninsula, respectively.

The US$15 million total loan amount is comprised of a US$9.63 million convertible loan provided by RCF VI and a US$5.37 million convertible loan provided by Pala.

The Lenders may elect to convert all or part of the principal amount of the convertible loans (including any capitalised interest) into ordinary shares at any time prior to maturity at a conversion price that is the lower of $0.80 per share or the price of any equity raised prior to repayment.

The Convertible Loans will bear interest at the rate of 8% per annum, payable quarterly in arrears in cash or shares at the Lenders election.

Maturity date of the Convertible Loans is 22 April 2017.

An arrangers fee of 2% of the amount available under the Convertible Loans is also payable in cash or in fully paid ordinary shares using a conversion price of $0.80 per share.


Planned Revenue Streaming Facility (RSF)

The RSF will allow commencement of Stage 2 development at the Lance Projects. This will include the engineering and construction of the Stage 2 Central Processing Plant (CPP), increasing the ion exchange capacity and bringing the elution, precipitation, drying and packaging processes in-house.

Significantly, this phase of the expansion is forecast to reduce cash operating costs by US$4-5/lb U3O8.

Additional Stage 2 construction, funded by the RSF, will include a further seven header houses and associated wellfield production units. Ramp-up to Stage 2 production rates are forecast to further reduce cash operating costs by US$5-6 per pound U3O8.

Expansion of well field capacity in Stage 2 has been timed to coincide with the ramp-up in delivery commitments under existing and expected new long term uranium concentrate sale and purchase agreements.


Board changes

Peninsula has appointed highly regarded mining executive Mark Wheatley as a non-executive director with extensive uranium and ISR experience. Neil Warburton has retired from his role as non-dxecutive director to pursue other business ventures.

John Harrison, currently a non-executive director will replace Richard Lockwood as non-executive chairman who is experiencing increased time pressure from his other business commitments. He will remain as a non-executive director of Peninsula.



Analysis

Peninsula currently has 75% of Stage 1 and 54% of Stage 2 production over the next 10 years committed under five term agreements with investment grade US and European utilities.

Peninsula currently has 7.9 million pounds of U3O8 under contract with major utilities located in the United States and Europe.

Projected revenue under these existing long term contracts has expanded to US$440 million. These contracts provide a large earnings stream to the company whilst allowing it to retain significant quantities of planned U3O8 production for future contracting during periods of anticipated improved uranium prices.

Expansion to Stage 2 will generate increased operating margins, (both in aggregate and on a per pound basis), and it is projected that the Company will be profitable at Stage 2 steady state production.

The strong support from major shareholders RCF and Pala is indicative of the future growth in Peninsula's future EBITDA in Stage 2.

The Lance Projects have a minimum mine life of at least 20 years, underpinned by 53.7 million pounds, the largest uranium ISR JORC-Code compliant resource in North America.

The weighted average delivery price for the five contracts over the next 10 years is US$56/lb U3O8 and at steady state production rates the Stage 2 expansion of the Lance Projects is forecast to reduce all-in sustaining cash costs from US$41/lb to US$31-32/lb.

Production ramp up at Lance continues with a 3.3% average daily head grade increase over last 40 days.

The Board changes provides a strong platform to expand and support MD Gus Simpson as the Lance projects move into a higher production gear.


Proactive Investors is a global leader reporting financial news, media, research and hosts events for listed emerging growth companies and investors across four continents.

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Tue, 26 Apr 2016 10:56:00 +1000 http://www.proactiveinvestors.com.au/companies/news/160715/peninsula-energy-ltd-funding-to-drive-lance-uranium-project-expansion-68267.html
<![CDATA[News - Peninsula Energy Ltd finalising documentation for project expansion funding ]]> http://www.proactiveinvestors.com.au/companies/news/160714/peninsula-energy-ltd-finalising-documentation-for-project-expansion-funding-68203.html Peninsula Energy Ltd (ASX:PEN) has been granted additional time by the ASX to outline details of project expansion funding, with the extension of a voluntary suspension.

Peninsula said that it is now finalising the documentation in preparation for signing which it expects to complete on or before 26th April 2016.

 

Proactive Investors is a global leader reporting financial news, media, research and hosts events for listed emerging growth companies and investors across four continents.

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Thu, 21 Apr 2016 13:30:00 +1000 http://www.proactiveinvestors.com.au/companies/news/160714/peninsula-energy-ltd-finalising-documentation-for-project-expansion-funding-68203.html
<![CDATA[News - Peninsula Energy Ltd given additional time for project expansion funding ]]> http://www.proactiveinvestors.com.au/companies/news/160713/peninsula-energy-ltd-given-additional-time-for-project-expansion-funding-68092.html Peninsula Energy Ltd (ASX:PEN) has been granted additional time by the ASX to outline details of project expansion funding, with the extension of a voluntary suspension.

Peninsula said that it anticipates that it will be in position to make this announcement to the market on or before Thursday 21 April, 2016.

Peninsula recently received proposals, and executed one non-binding term sheet, for an Income Streaming facility to fund expansion at the Lance uranium project, located in the Powder River Basin, Wyoming, U.S.

 

Proactive Investors is a global leader reporting financial news, media, research and hosts events for listed emerging growth companies and investors across four continents.

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Fri, 15 Apr 2016 12:00:00 +1000 http://www.proactiveinvestors.com.au/companies/news/160713/peninsula-energy-ltd-given-additional-time-for-project-expansion-funding-68092.html
<![CDATA[News - Peninsula Energy Ltd granted more time to outline project expansion funding ]]> http://www.proactiveinvestors.com.au/companies/news/160712/peninsula-energy-ltd-granted-more-time-to-outline-project-expansion-funding-67952.html Peninsula Energy Ltd (ASX:PEN) has been granted additional time by the ASX to outline details of project expansion funding, with the extension of a voluntary suspension.

Peninsula said that it anticipates that it will be in position to make this announcement to the market on or before Friday 15 April, 2016.

Peninsula recently received proposals, and executed one non-binding term sheet, for an Income Streaming facility to fund expansion at the Lance uranium project, located in the Powder River Basin, Wyoming, U.S.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX emerging companies with distribution in Australia, UK, North America and Hong Kong / China.

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Fri, 08 Apr 2016 12:30:00 +1000 http://www.proactiveinvestors.com.au/companies/news/160712/peninsula-energy-ltd-granted-more-time-to-outline-project-expansion-funding-67952.html
<![CDATA[News - Peninsula Energy Ltd given additional time to finalise funding ]]> http://www.proactiveinvestors.com.au/companies/news/160711/peninsula-energy-ltd-given-additional-time-to-finalise-funding-67820.html Peninsula Energy Ltd (ASX:PEN) has been granted additional time by the ASX to outline details of project expansion funding, with the extension of a voluntary suspension.

Peninsula said that it anticipates that it will be in position to make this announcement to the market on or before Friday 8 April, 2016.

Peninsula recently received proposals, and executed one non-binding term sheet, for an Income Streaming facility to fund expansion at the Lance uranium project, located in the Powder River Basin, Wyoming, U.S.

 

Proactive Investors is a global leader reporting financial news, media, research and hosts events for listed emerging growth companies and investors across four continents.

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Fri, 01 Apr 2016 15:00:00 +1100 http://www.proactiveinvestors.com.au/companies/news/160711/peninsula-energy-ltd-given-additional-time-to-finalise-funding-67820.html
<![CDATA[News - Peninsula Energy Ltd granted extension to outline project expansion funding ]]> http://www.proactiveinvestors.com.au/companies/news/160710/peninsula-energy-ltd-granted-extension-to-outline-project-expansion-funding-67736.html Peninsula Energy Ltd (ASX:PEN) has been granted additional time by the ASX to outline details of project expansion funding, with the extension of a voluntary suspension.

Peninsula said that it anticipates that it will be in position to make this announcement to the market on Friday 1 April 2016.

Peninsula recently received proposals, and executed one non-binding term sheet, for an Income Streaming facility to fund expansion at the Lance uranium project, located in the Powder River Basin, Wyoming, U.S.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX emerging companies with distribution in Australia, UK, North America and Hong Kong / China.

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Tue, 29 Mar 2016 12:00:00 +1100 http://www.proactiveinvestors.com.au/companies/news/160710/peninsula-energy-ltd-granted-extension-to-outline-project-expansion-funding-67736.html
<![CDATA[News - Peninsula Energy Ltd to update on project expansion funding ]]> http://www.proactiveinvestors.com.au/companies/news/160709/peninsula-energy-ltd-to-update-on-project-expansion-funding-67667.html Peninsula Energy Ltd (ASX:PEN) has been granted additional time to finalise a capital raising, in the form of a voluntary suspension.

It is expected the voluntary suspension will be lifted on or before Thursday 24 March 2016.

Peninsula recently received proposals, and executed one non-binding term sheet, for an Income Streaming facility to fund expansion at the Lance uranium project, located in the Powder River Basin, Wyoming, U.S.

 

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX emerging companies with distribution in Australia, UK, North America and Hong Kong / China.

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Wed, 23 Mar 2016 10:30:00 +1100 http://www.proactiveinvestors.com.au/companies/news/160709/peninsula-energy-ltd-to-update-on-project-expansion-funding-67667.html
<![CDATA[News - Peninsula Energy Ltd to reveal project expansion funding ]]> http://www.proactiveinvestors.com.au/companies/news/160708/peninsula-energy-ltd-to-reveal-project-expansion-funding-67619.html Peninsula Energy Ltd (ASX:PEN) has been granted a trading halt by the ASX pending details on project expansion funding.

Peninsula recently received proposals, and executed one non-binding term sheet, for an Income Streaming facility to fund expansion at the Lance uranium project, located in the Powder River Basin, Wyoming, U.S.

Income Streaming is a non-dilutive mechanism that sees a proportion of future sales revenue, over a finite time period, being exchanged for a one-off upfront cash payment that is to be used for additional capital expenditure.

Typically this would involve less than 5% of the produced material over the specific time period, structured to afford a commercial return to the provider but also to minimise the cashflow impact to the company.

The halt will remain in place until the opening of trade on Wednesday 23rd March 2016, or earlier if an announcement is made to the market.

 

Proactive Investors is a global leader reporting financial news, media, research and hosts events for listed emerging growth companies and investors across four continents.

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Mon, 21 Mar 2016 13:30:00 +1100 http://www.proactiveinvestors.com.au/companies/news/160708/peninsula-energy-ltd-to-reveal-project-expansion-funding-67619.html
<![CDATA[News - Peninsula Energy Ltd adds fifth uranium sale contract for Lance projects ]]> http://www.proactiveinvestors.com.au/companies/news/160707/peninsula-energy-ltd-adds-fifth-uranium-sale-contract-for-lance-projects-67531.html Peninsula Energy Ltd (ASX:PEN) has clinched its fifth sale of uranium concentrate for the Lance uranium project in Powder River Basin, Wyoming to a utility company.

The fifth long term sale and purchase contract signed by Peninsula, believed to be with a major European utility is for delivery of 4.0 million pounds of U3O8 over a 10-year period commencing at the end of 2020.

Peninsula has a Total of 7.9 million pounds of U3O8 under contract for delivery to major utilities located in the United States and Europe. Total revenue over the life of these contacts is US$440,000,000.

Today's agreement also contemplates increasing the quantity to 50% of annual Lance production from 2026 onwards.

Peninsula's managing director Gus Simpson has left open terms relating to the increased quantities to be negotiated in 2022, when prevailing market conditions should be more favourable for producers.

The contracts do provide a substantial earnings stream to Peninsula, underpinning short term Lance project development.

This enables Peninsula to retain significant quantities of planned U3O8 production for future periods of anticipated improvement in uranium prices.

Significantly, the weighted average delivery price for the five contracts over the next 10 years is US$56 per pound of U3O8.

This compares very favourably to the US$45 per pound of U3O8 weighted average delivered price achieved over the past decade by the four largest publicly traded uranium mining companies: Cameco Corporation, Energy Resources Australia, Paladin Energy and Uranium One.

It takes Peninsula further down the road as a global, sustainable, low-cost uranium concentrate producer at Lance.


Stage 1 production - 75% committed

During the period 2016 - 2021, 75% of Stage 1 production from Lance is committed to long term contracts.

Under the existing sale agreements, 54% of annual Stage 2 production is committed during the next 10 years. This de-risks the expansion at the Lance Projects, while allowing for additional sales contracts to be struck when prices are higher in future years.

Managing director and CEO Gus Simpson said: “Over the past five years Peninsula has been focussed on demonstrating to United States and European utilities its capacity to become a reliable long term supplier of uranium.

"The establishment of good relations with end-users with end-users has provided a significant long term revenue stream that underpins the Company’s development in the short term and provides a solid basis for its long term growth”.


Streaming agreements

Peninsula is look toward Income Streaming as a means of financing future expansion plans.

The company has received proposals and executed one non-binding term sheet for an Income Streaming facility to fund expansion at Lance.

Income Streaming is a non-dilutive mechanism that sees a proportion of future sales revenue, over a finite time period, being exchanged for a one-off upfront cash payment that is to be used for additional capital expenditure.

Typically this would involve less than 5% of the produced material over the specific time period, structured to afford a commercial return to the provider but also to minimise the cashflow impact to the company.


Uranium prices

Improvement in uranium prices is expected by most analysts to be driven by the increased use of nuclear power as a means of cost effective carbon free baseload power generation.

Currently, there are 440 operable nuclear power reactors globally, capable of generating 384 GWe of carbon free electricity per annum.

A further 65 reactors are currently under construction and an additional 510 reactors are planned or proposed in the future.

Operating reactors will consume approximately 170 million pounds of U3O8 in 2016 with a forecast growth rate of 4% p.a.

This growth is led by China, India and Russia, and supported by countries such as the United Arab Emirates, South Africa and Saudi Arabia. All of these countries are seeking increased quantities of reliable carbon-free baseload power generation.


Analysis

The fifth sales contract should provide additional security to future revenue and potentially de-risks expansion plans.

It also enables future uncontracted Stage 2 and Stage 3 production capacity to capitalise on higher future uranium prices.

Its substantial portfolio of long term contracts at prices that provide a significant margin over all-in sustaining costs of production and at average prices higher than Cameco Corporation, Energy Resources Australia, Paladin Energy and Uranium One should drive the market valuation of Peninsula higher.

Finalization of the pending NYSE listing should improve liquidity and access to capital, as well as a potential re-rating as Lance proceeds.


Proactive Investors is a global leader reporting financial news, media, research and hosts events for listed emerging growth companies and investors across four continents.

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Tue, 15 Mar 2016 14:00:00 +1100 http://www.proactiveinvestors.com.au/companies/news/160707/peninsula-energy-ltd-adds-fifth-uranium-sale-contract-for-lance-projects-67531.html
<![CDATA[News - Peninsula Energy Ltd signs uranium contract with European utility ]]> http://www.proactiveinvestors.com.au/companies/news/160706/peninsula-energy-ltd-signs-uranium-contract-with-european-utility-67461.html Uranium producer Peninsula Energy Ltd (ASX:PEN) has clinched a long term uranium concentrate sale and purchase agreement with a major European utility and nuclear industry leader diversifying its client portfolio.

The agreement is for the sale and purchase of 4.0 million pounds of U3O8 from the Lance Projects over a 10 year period beginning at the end of 2020 and contemplates increasing this to 50% of annual mine production from 2026 onwards.

Lance is located in Wyoming in the U.S., and has significant mine life upside given untapped exploration potential.

The project already has a 54 million pound resource base and licenced mining rate of 3 million pounds annually, which allows the ability to increase production quickly.

No pre-stripping or mining development required, and production wells access the ore body directly.

Gus Simpson, managing director and CEO, commented:

“Peninsula is very pleased to execute this contract as it adds geographical diversity to our sales portfolio.

"It is an important vote of confidence in our projects, management and ability to deliver uranium well into the future.

"In addition we have worked with the utility for several years during the evaluation period and we anticipate a long and mutually beneficial relationship."


Analysis

The securing of such a significant contract is an achievement for the company and comes after several years of negotiation and extensive due diligence on Peninsula and its projects.

It also delivers on the company strategy of aligning with major utilities requirements.

While price and annual quantities are subject to commercial confidentiality, the terms of the agreement provide certainty of sale and a committed revenue stream.

This agreement and the establishment of a long term relationship with this large customer is a major catalyst for the company, underpinning stage 2 production levels and its long term plan to become a significant and profitable global supplier of uranium.

Uranium market outlook

There are several key drivers for a potential lift in the uranium price in 2016/17, such as:

- Return of utility contracting;
- Japanese restarts increasing;
- China construction – domestic;
- China construction – export;
- India – strategic reserve established; and
- Strong global demand growth.

Proactive Investors is a global leader reporting financial news, media, research and hosts events for listed emerging growth companies and investors across four continents.

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Fri, 11 Mar 2016 11:30:00 +1100 http://www.proactiveinvestors.com.au/companies/news/160706/peninsula-energy-ltd-signs-uranium-contract-with-european-utility-67461.html
<![CDATA[News - Peninsula Energy has high grade uranium hits in South Africa ]]> http://www.proactiveinvestors.com.au/companies/news/160705/peninsula-energy-has-high-grade-uranium-hits-in-south-africa-67211.html Peninsula Energy (ASX:PEN) has recorded high-grade, near-surface uranium intercepts from a re-logging of existing drill holes completed during December 2015 to February 2016 at the Rietkuil project area at Peninsula’s Karoo Projects in South Africa.

Re-logging is occurring in areas that are outside the existing JORC resource of 56.9 million pounds of uranium defined in 2014.

Hence the re-logging and results obtained will be included in an update of the Karoo resource.

While Peninsula’s uranium producing Lance Project in Wyoming is rightfully the focus of attention, with a NYSE MKT listing in train, Karoo could provide Peninsula with production from South Africa over time.

As well, it would assist to ease the burden of the chronic power shortages in South Africa.

Best intercepts from the re-logging included: 9.5 feet at 2,408 parts per million uranium oxide equivalent from 37.9 feet; 8.9 feet at 2,422 parts per million uranium oxide equivalent from 27.6 feet and 6.6 feet at 2,800 parts per million uranium oxide equivalent from 47.4 feet.


RSA on nuclear road

This upbeat news flow could not come at a more opportune time, as South Africa gears up for nuclear expansion to add to the two nuclear reactors which provide about 5% of the country’s electricity supply.

In 2014, South Africa agreed to a US$10 billion nuclear contract with Russia’s state nuclear energy firm Rosatom as a first step towards achieving South Africa’s nuclear goals.

Peninsula’s announcement comes just days after South African President Jacob Zuma committed to a target of 9.6GWe by 2030, with the first new reactor coming online in 2030.

South Africa’s physical and psychological shift towards nuclear energy consumption should provide tailwinds for uranium mining in the country, creating an opportunity for the high-grade Rietkuil projects.

The Rietkuil project contains a resource of 23.3 million tonnes of ore containing 56.9 million pounds of uranium at a grade of 1,108 parts per million uranium oxide.


Exploration target

But given the expansive land package at Rietkuil, Peninsula has outlined an exploratory resource growth target of 250-350 million pounds of uranium.


Analysis

While operations at Lance continue to be the focus for Peninsula, Karoo provides a very handy high grade project that is primed and likely timed to be developed as nuclear expansion momentum builds in South Africa.

A pre-feasibility study is underway.
 
The re-logging of earlier drill holes should result in a significant increase in the Karoo resource base. Activities supporting the application for the grant of a mining license for Karoo are continuing.

Peninsula’s flagship Lance in-situ recovery project in the U.S. continues to perform to expectation.

The low cost ISR processing technique, as well as long term contracts struck by Peninsula when uranium prices were far higher provides the platform for Lance to be a highly profitable operation.


Proactive Investors is a global leader reporting financial news, media, research and hosts events for listed emerging growth companies and investors across four continents.

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Fri, 26 Feb 2016 09:00:00 +1100 http://www.proactiveinvestors.com.au/companies/news/160705/peninsula-energy-has-high-grade-uranium-hits-in-south-africa-67211.html
<![CDATA[News - Peninsula Energy nears uranium expansion approval ]]> http://www.proactiveinvestors.com.au/companies/news/160704/peninsula-energy-nears-uranium-expansion-approval-66843.html Peninsula Energy's (ASX:PEN) U.S. operating subsidiary Strata Energy has tracked new permitting progress with local nuclear regulators as it advances a project expansion at the Lance uranium operations.

During 2015, Strata submitted a request to the Nuclear Regulatory Commission to amend its existing license to include the Kendrick expansion area within the Ross permit area at Lance.

The NRC initiated its acceptance review of the expansion request in September 2015 and has now notified Strata that the application is complete and has been accepted for detailed technical and environmental review.

Kendrick is adjacent to Ross and under the current life of mine plan is scheduled to come online during the 2019 calendar year to supply uranium to the central processing plant.

As the application is an amendment to the existing license, the review timing is expected to be reduced given the exhaustive technical and environmental review process already conducted by the NRC at Ross.

This progress has coincided with advances in Peninsula’s efforts to list its American Depositary Shares on the New York Stock Exchange – MKT.

The listing will provide access to an active market well versed in the benefits of nuclear power generation.

Average daily turnover of uranium peer companies dual listed on a U.S. stock exchange consistently exceeds the liquidity levels achieved on their non-U.S. exchange by a factor of 4 to 7 times.


Proactive Investors is a global leader reporting financial news, media, research and hosts events for listed emerging growth companies and investors across four continents.

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Wed, 03 Feb 2016 14:00:00 +1100 http://www.proactiveinvestors.com.au/companies/news/160704/peninsula-energy-nears-uranium-expansion-approval-66843.html
<![CDATA[News - Peninsula Energy clears way for listing on NYSE MKT ]]> http://www.proactiveinvestors.com.au/companies/news/160703/peninsula-energy-clears-way-for-listing-on-nyse-mkt-66790.html Newest uranium producer Peninsula Energy (ASX:PEN) has filed an amended registration statement with the United States Securities and Exchange Commission to clear the way for listing of Peninsula shares on a U.S. stock exchange.

The updated registration included changes to reflect the company is now in production as well as other requested information.

Peninsula is seeking a secondary listing of American Depositary Shares on the NYSE MKT.

The ramp up at Peninsula's Lance in-situ recovery uranium project in Wyoming, U.S.A is on track with production well flow-rates slightly above expectation.

Since the start of production uranium head grades are increasing daily in line with expectation and several production wells are already producing uranium concentrations in excess of the rates used in the life of mine (LOM) production forecasting.


Proactive Investors is a global leader reporting financial news, media, research and hosts events for listed emerging growth companies and investors across four continents.

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Tue, 02 Feb 2016 10:00:00 +1100 http://www.proactiveinvestors.com.au/companies/news/160703/peninsula-energy-clears-way-for-listing-on-nyse-mkt-66790.html
<![CDATA[News - Peninsula Energy: A$2.60 price target from Rodman & Renshaw ]]> http://www.proactiveinvestors.com.au/companies/news/160702/peninsula-energy-a260-price-target-from-rodman-renshaw--66771.html Peninsula Energy (ASX:PEN) has been rated a Buy and given a A$2.60 price target after New York based Rodman & Renshaw initiated research coverage on the uranium producer. Current share price is $0.935.

Here is a summary of the report:

Emerging ISR Producer with Scalability

Peninsula Energy presents a unique opportunity. Peninsula, based in Australia, owns the Lance Projects located in Wyoming and is focused on developing an In-Situ Recovery (ISR) uranium powerhouse.

In our view, the low cost ISR processing technique, coupled with high priced long-term contracts positions Peninsula as a viable uranium producer despite spot uranium prices hovering around $35 per pound.

Management began signing long term contracts for production at Lance in 2011 when uranium prices were significantly higher than today. The firm currently has contracts in place totaling 7.8 million pounds at an average price of $59 per pound through 2020.

Therefore, the average price Peninsula is expected to receive throughout the remainder the decade is significantly higher than the current long-term price of approximately $45 per pound, which we feel locks in margin and de-risks operations as a whole.

In our view, Peninsula's long-term contracts and low cost ISR operations position the firm to thrive despite lower spot uranium prices.

First production was reached in 2015. In December 2015, the firm brought its Ross Permit Area (located within the Lance Projects) online with ISR production commencing.

We currently estimate average cash costs of just $22 per pound during Stage 1, generating an impressive gross margin of approximately 63%. Further, Lance hosts a significant resource base totaling 53.6 million pounds, including 4.5 million pounds in Measured, 12.6 million pounds in Indicated and 36.5 million pounds in Inferred resources.

We note that while the majority of resources are Inferred, the firm currently has six drill rigs operating, which we feel could ultimately increase resources while upgrading the existing resource base.

The Lance Projects are scalable. The Lance Projects are currently being developed in a three-stage approach with Stage 1 recently completed. Moreover, Stage 1 provides Lance with production capabilities totaling 600-800,000 pounds per year, which is expected to be sourced from the Ross Permit Area.

Stages 2 and 3 are expected to bring total capacity to 1.2 and 2.3 million pounds per annum, respectively. In our view, the staged expansion approach at Lance should allow the firm to not only smooth out capital requirements but finance a portion of Stage 2 ($35 million) and Stage 3 ($78) million with cash flow from operations. We view this strategy as prudent as capital requirements for incremental expansions can be completed depending on market conditions at the time.

We are initiating coverage on Peninsula Energy with a Buy rating and A$2.60 per share price target. Our valuation is based on a DCF of operations at the Lance Projects utilizing a 10% discount rate and an average uranium sales price of $59 per pound (per PEN's long term contracts) through 2020 and $60 per pound thereafter.

Further, we add in-situ value for resources at Peninsula's Karoo Projects in South Africa. Additionally, we utilize a staged approach with respect to expansion at Lance with Stage 2 coming online in 2018 and Stage 3 following in 2020.

We view Peninsula's average long-term contract price of $59 per pound as significant, and believe the firm should enjoy the benefits of strong margins relative to peers without contractual commitments despite weaker uranium prices.

 

Proactive Investors is a global leader reporting financial news, media, research and hosts events for listed emerging growth companies and investors across four continents.

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Fri, 29 Jan 2016 13:43:00 +1100 http://www.proactiveinvestors.com.au/companies/news/160702/peninsula-energy-a260-price-target-from-rodman-renshaw--66771.html