Peninsula Energy Ltd (ASX:PEN) has taken a major step toward reopening and expanding its flagship Lance in-situ recovery (ISR) uranium project in Wyoming, US, following a key state government approval.
The Wyoming Department of Environmental Quality (WDEQ) has approved the company’s Interim Restoration Report for the low pH field restoration demonstration, paving the way for Peninsula to develop new mining units using the low pH ISR method across the entire Ross Permit Area at Lance.
This decision concludes the final phase of the risk-informed, performance-based, stepwise implementation plan for low pH ISR designed by the WDEQ and the company.
Switching from an alkaline ISR to a low pH ISR operation is expected to significantly lower operating costs and align the Lance Project method of uranium recovery with the bulk of global ISR uranium producers.
“Excellent position to rapidly re-start uranium production”
Peninsula managing director and chief executive officer Wayne Heili said: “This is a very important step in our plan to re-activate uranium recovery operations at Lance.
“Lance holds the largest defined uranium resource of any recently-producing US ISR project and is the only one authorised to use the industry-leading low pH extraction method.
“We are already in an excellent position to rapidly re-start uranium production by transitioning our two fully developed mine units to low pH operations.
“This WDEQ decision means that we are now fully permitted to develop a sustainable low pH ISR operation at Lance.”
Uranium price surges 29%
Earlier this month, Kazatomprom slashed its 2020 production forecast by up to 10.4 million pounds, equivalent to 8% of global supply, because of government-imposed measures to mitigate the spread of coronavirus.
Kazatomprom’s decision to reduce production will also impact Canadian producer Cameco, which had expected to purchase almost 5 million pounds of uranium from a mine it jointly owns with Kazatomprom in Kazakhstan.
The recent supply shocks have caused USD uranium price to surge almost 29% since the start of 2020, rising from US$24.85 to $32 per pound.
Final investment decision
Peninsula’s final investment decision for the commencement of low pH operations at Lance is dependent on the evaluation of outcomes from ongoing de-risking and optimisation activities and on continued sustainable improvement in the market for US-produced uranium.
Customary regulatory review of operating procedures, new production areas and surety bond updates will also be required.