PERTH (miningweekly.com) – ASX-listed Peninsula Energy was hoping to start uranium production from its Lance projects, in the US, by the first half of 2015, under a newly approved scalable production plan, the company said on Tuesday, announcing a re-engineered development plan.

Studies completed in 2013 had projected that ore would be processed from the Ross, Kendrick and Barber units, and would feed into a central processing plant with a capacity of up to three-million pounds a year.

However, Peninsula said the board had now approved a three-stage scalable development plant for Wyoming-based Lance, which would provide for a lower-cost start-up.

Under the first stage, Lance would produce between 500 000 lb and 700 000 lb of uranium oxide (U₃O₈₎ a year, which would be increased to 1.2-million pounds a year.

The Stage 3 development would further increase production to a rate of 2.3-million pounds of U₃O₈ a year.

Peninsula executive chairperson Gus Simpson said that the scalable production plan reduced the initial funding requirement to initiate sustainable production at Lance, while also decreasing the volume of uranium that needed to be contracted in the Stage 1 operation, and allowing the company to defer most of the planned uranium sales contract until the uranium price was more attractive.

Furthermore, commissioning of the processing facility and well field operations in Stage 1 also significantly derisked the Stage 2 and Stage 3 upgrades.

“This extended ramp-up flexibility allows Peninsula to get into production while simultaneously positioning the company to schedule capacity increases with improved uranium prices, delivering greater value to the company and our shareholders,” Simpson said.

He pointed out that while some production needed to be contracted over the next five years, the existing contract that the company had in place allowed for an acceptable return on investment, and preserved the majority of the existing in-ground uranium for contracting at a later date.

Prospective funding partners had positively received the scalable production plan, Simpson added, with a funding solution being well advanced.

The company was now targeting first production for the first half of 2015, in time to meet its scheduled July 2015 uranium deliveries.