Peninsula Minerals (ASX:PEN) has received formal Requests For Product (RFP) from three USA power utilities to supply uranium oxide from its Lance Projects in Wyoming.
Peninsula aims to secure the sale of U3O8 at an escalated fixed price, fixed quantity and term for the Lance Projects production, which is planned to commence in 2012.
Over the past twelve months Peninsula has engaged key utility and end user groups with the ultimate aim of securing long term sale and purchase agreements for U3O8 and is currently responding to the RFP’s it has received.
Gus Simpson, executive chairman, said “as Peninsula advances the permitting and DFS we are also negotiating long term sale agreements which will add to the company’s ability to achieve a more attractive funding outcome”.
Peninsula’s intention is to secure long-term agreements for more than 50% of its forecast uranium oxide product from Lance.
The company expects that these agreements will be put in place between the completion of the Definitive Feasibility Study (DFS) and the debt financing arrangements being finalised.
Together with the completion of the DFS and permitting, the securing of long-term sale contracts will add to Peninsula’s ability to secure favourable project financing terms and maximise the debt component.
The next significant milestones for the company include submission of key permitting applications as well as a resource upgrade in December 2010, then completion of its DFS in January 2011, with a decision to mine likely in February 2011.
Peninsula is targeting 17mlb U3O8 in the indicated or better category (currently it has 9.2mlb indicated or better) by December 2010, which will enable completion of the DFS with 15mlb of saleable product.