Name and Location
Lance uranium projects, Wyoming, US.

Client
Peninsula Energy.

Project Description
Peninsula’s board has approved a lower-cost three-stage scalable production development plan for its Lance projects, in Wyoming.
The scalable production development plan comprises a three-stage ramp-up strategy.

Stage 1 entails a production rate of between 500 000 lbs/y and 700 000 lbs/y of uranium (U3O8) and includes:
• up to seven wellfield units in simultaneous operation at any point;
• the installation and commissioning of six ion-exchange columns in the central processing plant (CPP); and
• the significant reduction in initial CPP building structure and footprint – from the original design parameters – to house the reduced plant and equipment.

Stage 2 involves a production rate of 1.2-million pounds of U3O8 a year and entails:
• up to 14 wellfield units in simultaneous operation at any point;
• the expansion of the CPP building structure and footprint to accommodate additional processing equipment;
• the installation and commissioning of an additional six ion-exchange columns in the CPP, increasing the total number of ion-exchange columns to 12; and
• the installation of elution, drying and packaging equipment in the expanded CPP.

Stage 3 involves a production rate of 2.3-million pounds of U3O8 a year and entails:
• the development of 14 wellfield units in Barber;
• the construction of a satellite plant comprising 12 ion-exchange columns and a reverse osmosis module at Barber; and
• the trucking of loaded resin from the satellite plant to the CPP for treatment and packaging.

The scalable production development plan significantly reduces the initial funding required to initiate sustainable production at the Lance projects, decreases the volume of U3O8 needed to be contracted in Stage 1 and enables the company to defer most of the planned uranium sales contracts until the uranium price is more favourable.

Further, commissioning of the processing facility and wellfield operations in Stage 1 significantly derisks Stage 2 and Stage 3 upgrades.

Net Present Value/Internal Rate of Return
The project has an unlevered pretax net present value at 8% of $288-million and pretax internal rate of return of 36%.

Value
Remaining capital expenditure (capex) for Stage 1, including contingency, is $33-million.
Capex for Stage 2, including contingency, is $35-million.
Capex for Stage 3, including contingency, is $78-million.

Duration
Peninsula is targeting the start of production in the first half of 2015 in time for its scheduled July 2015 uranium deliveries.

Latest Developments
Peninsula is currently engaged in advanced negotiations with several existing shareholders and other international institutions to finalise the project funding for Stage 1 of the projects.

These parties have completed technical and site due diligence, with final commercial and legal due diligence
under way.

Stage 2 and 3 are expected to be funded by a combination of debt and working capital surplus and it is likely that one or more of the current senior secured debt providers the company has been engaged with over the last 18 months will be the project debt provider(s).

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Peninsula Energy, tel +61 8 9380 9920, fax +61 8 9381 5064.