Sign up Australia
Proactive Investors - Run By Investors For Investors

Peninsula Energy buying uranium low, selling high

The company has existing contracts securing US$420 million revenue.
Peninsula Energy buying uranium low, selling high
Peninsula is currently covered by five research houses

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.


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.

View full PEN profile View Profile

Peninsula Energy Ltd Timeline

Related Articles

Picture of territory at Piedmont Lithium Project
April 30 2018
The company has acquired 630 acres in four separate transactions between September 2017 and March 2018.
September 04 2018
Regency’s partner LHC (Legacy Hill Coal) is the operator of MET and has a 53% stake, with the UK business owning the rest
project area
July 12 2018
The Gabanintha Vanadium Project is one of the highest-grade vanadium deposits in the world.

No investment advice

The information on this Site is of a general nature only. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions. You acknowledge and understand that neither the Company, its related bodies corporate, the information providers or their affiliates will advise you personally about the nature, potential value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter. You should read our FSG and any other relevant disclosure documents and if necessary seek persona advice prior to making any investment decision.

You understand and agree that no Content (as defined below) published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person.

You understand that in certain circumstances the Company, its related bodies corporate, the information providers or their affiliates may have received, or be entitled to receive, financial or other consideration in connection with promoting, and providing information about, certain entities on the Site and in communications otherwise provided to you.

You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate. From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Before you act on any general advice we provide, please consider whether it is appropriate for your personal circumstances.

© Proactive Investors 2018

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use