Name and Location
Lance uranium projects, Wyoming, US.

Client
Strata Energy, a wholly owned subsidiary of Peninsula Energy.

Project Description
Peninsula’s board has approved a lower-cost three-stage scalable production development plan for its Lance projects.

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 a 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
Not stated.

Latest Developments
The US Nuclear Regulatory Commission (NRC) has accepted Peninsula’s plans to expand its Lance uranium projects.

Peninsula subsidiary Strata Energy last year submitted a request to the NRC to amend its existing licence at Lance so that it includes the Kendrick expansion area within the Ross permit area.

In December 2015, Peninsula received the NRC’s authorisation to begin in situ uranium recovery operations from the Ross permit area at the Lance projects.

Kendrick is adjacent to Ross and under the current life-of-mine plan, was scheduled to come on line during 2019 to supply uranium to the central processing plant.

“Development of the Kendrick expansion area is an integral part of the production growth plans at the Lance projects,” Peninsula MD and CEO John Simpson has said.

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.