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Additional Information

Market:	ASX
Sector:	General Mining
EPIC:	PEN
Latest Price:	0.06 (17.65% )
52-week High:	0.15
52-week Low:	0.03
Market Cap:	128.13M

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Peninsula Energy Full Peninsula Energy profile here

Peninsula Energy (ASX: PEN) is an emerging ASX listed Uranium producer with assets in the USA and South Africa. The company is focused on advancing the Lance ISR Projects, located in the Powder River Basin, Wyoming USA through to production, and to take the Karoo Projects in South Africa further up the development curve.

Peninsula Minerals completes PFS, Lance Uranium Project to advance on robust economics

Wednesday, July 14, 2010 by Proative Investors

Australian-listed uranium explorer Peninsula Minerals (ASX: PEN) has completed a Pre-Feasibility Study on the Ross and Barber projects, the first two planned production centres at the Lance Projects in Wyoming, confirming robust economics and the viability of a planned In-Situ Recovery mining operation.

As a result of the strong economic case for development of Lance projects, a Definitive Feasibility Study will commence immediately with planned completion by January 2011. Construction of a centralised ISR processing plant has been slated to commence in 2H 2011 with a production timeline of 2012 and ramp up to 1.5 million pounds of uranium per annum.

The all important cash costs were estimated as followed; life of Mine average C1 Cash operating costs of US$14 per pound U3O8 and total cash cost is estimated at $21.42 per pound U3O8 (includes royalties & taxes).

The PFS involved a detailed assessment of the proposed ISR mining methods and process options at the Ross and Barber projects, estimates of project recoveries, capital and operating costs.

The capital and operating costs were provided by Lyntek Inc (Lyntek), a Denver based engineering company with global experience in ISR plant design and operation.

Gus Simpson, executive chairman, said “we are very pleased with the outcome of the PFS as it clearly supports the viability of the Lance Projects and our aim of commencing uranium production at Lance in 2012.”

Significantly, the PFS modelling analysis produced an NPV after tax of US$162m (discounted at 10%) with an IRR of 47.8% on the initial capital investment.

In the modelling, the Lance Projects are estimated to generate a net cash inflow after tax of $US407m over the 13 year mine life with average C1 cash operating costs of US$14 per pound U3O8.

Initial development capital costs are estimated at US$53m.

For PFS modelling purposes, all production from the Lance Projects is assumed sold at a long term average price of US$74 per pound U3O8. Sensitivities have been incorporated into the model at various price ranges. Based on current long term prices and the consensus on future long term pricing, pricing in the range of US$65-75 per pound U3O8 has been used in the PFS model.

Peninsula expects that the current level of drilling at Ross and Barber will convert the majority of the existing inferred resource to indicated status over the remainder of 2010, such that it can be considered for conversion to a reserve as part of the DFS.

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