Peninsula Energy (ASX: PEN) has upgraded the economic viability of the Lance In-Situ Recovery Uranium Projects in the United States following the results of a Feasibility Study at the project.
The recently completed Feasibility Study was based on the March 2012 JORC Resource of 51.5 million pounds of uranium, across the Ross, Kendrick and Barber Production Units. This assumes the conversion of 23.88mlbs of the 36.78mlbs of inferred U3O8 resources to indicated category or better.
Initial production of 750,000 pounds per annum will come from the Ross production unit, ramping up to steady state production of 2.2 million pounds per annum over three years with the inclusion of Kendrick and Barber.
Production is expected to feed into a Central Processing Plant with an expandable capacity of up to 3 million pounds per annum. Vanadium will not be produced in the early stages of production from Lance.
In terms of economics, the study highlighted:
- Net present value of US$252 million (an 8% discount rate)
- Initial capital cost of US$78 million, including Central Processing Plant
- C1 cash costs of US$12.94 per pound, excluding Vanadium credits
- Steady state total production, Central Processing Plant and production unit expansion, ongoing wellfield development and closure costs of US$36.60 per pound
The Feasibility Study has optimised the engineering and operational aspects of the Definitive Feasibility Study, while taking into account the updated JORC Resource.
Peninsula’s Lance project, situated in the Powder River Basin in Wyoming, U.S., has an initial mine plan based on 20 million pounds of recovered uranium.
Importantly, there is plenty of potential for further exploration upside within the Lance project area.
The Feasibility Study will form the basis for the financing of the Lance projects, with proposals for project development financing already received. These proposals are being progressed.
Environmental bonding is expected to be lodged in the June quarter of 2012, with the aim of receiving a Permit to Mine from the Wyoming Department of Environmental Quality shortly after.
Subject to regulatory approvals, the Lance Projects remain on the road to uranium production in 2013.
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