PEN 0.00% 28.5¢ peninsula energy limited


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    North America’s Next Low-cost Uranium Producer


    Peninsula Energy (ASX:PEN) is a near-term uranium producer with assets in both the United States and South Africa. The Company’s flagship property is the Lance Projects in Wyoming’sprolific uranium mining district, the Powder River Basin. Production at Lance is expected to commence in 2015 and long-term sales contracts with major U.S. energy producers already in place. At its Karoo Projects in South Africa, Peninsula has completed a positive scoping study and a pre-feasibility study is now underway.
    Peninsula is led by a highly experienced management team in North America made up of individuals that have successfully found, built, and operated mines worldwide, with companies such as Cameco and De Beers. The Company has a combined nearly $70 million in institutional funding from JP Morgan AM UK, BlackRock Funds, Pala and Resource Capital Funds.

    • Set to be the ASX’s next uranium producer.
    • Strong financial support from first-tier shareholder base.
    • Low-risk, clear path to production.
    • Project funding is fully committed and secured.
    • Experienced management team with decades of experience.
    • Lance Projects: more than 53.7 million pounds of U3O8 compared to regional peers with resources in the range of 11.2 million pounds to 21.9 million.
    • Production at the Lance Projects to commence in 2015.
    • Significant operating margins achievable even at the current uranium price.
    • The Karoo Projects offers diversity of both supply and jurisdiction.

    Lance Projects, Wyoming

    The Lance Projects includes a planned in-situ uranium mine fully-funded, fully permitted and currently under construction in Wyoming’s Powder River Basin. The Basin is known to contain large volumes of uranium deposited in sandstone readily accessible via in-situ recovery (ISR) methods. Such projects are known to demonstrate significantly low CAPEX and OPEX as well as higher profit margins than hard rock producers.
    The project area covers more than 120 square kilometres within which there is a combined total of 305 line kilometres of known stacked roll fronts. Only a small percentage of this area has been explored with more than 90% of the drilling concentrated with the advanced Ross, Kendrick and Barber zones.
    Significant resource, significant upside
    The exploration target ranges from 158 to 217 million pounds, sufficient to support a mine life of up to 70 years. Exploration work in these zones has resulted in a JORC-compliant ISR resource estimate of 53.7 million pounds U3O8 — the largest uranium ISR JORC-Code compliant resource in North America. Regional operators such as Ur-Energy, Uranerz, Powertech and AUC LLC/Bayswater have resources with a range of 11.2 million pounds to 21.9 million.
    Permitting in place
    Peninsula has obtained all licences and permits required in order to commence production at the Lance Projects, including:
    • April 2011: Deep Disposal Well License granted by the Wyoming Department of Environmental Quality (WDEQ) for the construction, testing and operation of Underground Injection Control Class 1 wells.
    • November 2012: Permit to Mine granted by the WDEQ, allowing for first planned production at the Ross area.
    • April 2014: Source Material License (SML) issued by the US Nuclear Regulatory Commission concluding four years of dedicated and detailed permitting work.
    With the final permit in place, the Lance Projects are now headed toward production in 2015.
    Producing in 2015
    The Lance Projects proposed operation has a reported mine life of 20 years and is fully permitted for up to three million pounds of production per year. Peninsula has devised a three-stage, scalable production development plan with the first stage of production commencing in 2H 2015 at a rate of up to 700,000 mlbs per year. Stage 2 will increase production to 1,200,000 mlbs per year by 2018 and Stage 3 will increase production to 2,300,000 mlbs per year by 2020. Production will further increase alongside increases in the price of U3O8.
    Purchasing contracts secured for 2015 to 2024
    Further demonstrating the significant potential of the Lance Projects, Peninsula has secured long-term purchase contracts with key U.S. power utilities.
    In February 2011, Peninsula signed a long-term sale and purchase agreement to supply uranium oxide from the Lance Projects to one of the largest energy producers in the United States. The weighted average contract pricing over the term of the contract is US$73-75/lb, which compares very favourably with existing uranium contract prices. Under the terms of the sale agreement, Peninsula will supply approximately 1 million pounds U3O8 over 5 years, commencing in early 2016.
    In November 2014, the Company entered into an additional long-term uranium sale and purchase agreement with another major United States power utility. Deliveries of uranium concentrate under the new agreement will commence in 2016 and continue through until 2024. Up to 912,500 pounds of uranium will be delivered by Peninsula under the new agreement.
    The agreement contains a base price that is consistent with the current industry term contract price during November 2014. Escalation is applied to the base price on a quarterly basis over the term of the contract, commencing in the first quarter of calendar year 2015.
    These contracts will provide Peninsula with additional revenue security as the Company brings the Lance Projects through the planned three-stage production ramp-up commencing with Stage 1 in 2H 2015.
    Peninsula continues to progress negotiations with a number of other major utilities and expects to execute additional Term Contracts during the first half of 2015.
    Karoo Projects, South Africa

    The Karoo Projects is a uranium-molybdenum property located in the Karoo Basin of South Africa. Peninsula acquired a 74 percent interest in the property from AREVA in December 2013. The interest includes 41 prospecting rights covering 7,774 square kilometers of the main uranium-molybdenum bearing sandstone channels. The remaining 26% interest is held by BEE partners as required by South African law.
    Pre-feasibility study underway
    Following the completion of a positive scoping study in September 2013, Peninsula initiated a Pre-Feasibility Study currently underway on the property.
    In October 2014, Peninsula radiometrically re-logged historic drill holes at the Rietkuil project area discovering significant intercepts. The loggings were first discovered back in the 1970s by Union Carbide Exploration Corporation with probing and re-logging occurring in areas that are outside the existing JORC code compliant resources. They ranged from 2.9 feet at 4,728 parts per million (ppm) eU3O8 from 24.9 feet to 2.8 feet at 3,307ppm eU3O8 from 31.8 feet. The results confirmed shallow, high grade historic mineralisation in the Rietkuil area and the company says they have potential to extend the JORC code-compliant resource.
    The JORC-compliant resource estimate for the property is 56.9 million pounds of eU3O8. The property has a high grade resource of 1,108ppm, resource with a cut-off of 600ppm. The exploration target ranges from 250 to 300 million pounds of U3O8, including the 56.9 million pounds JORC-compliant resource.
    Peninsula intends to continue exploration over this ground using airborne radiometric data, geological mapping and prospecting together with follow up drilling with the intention of locating additional material for future mining and processing.

    Peninsula Energy is an ASX-listed company with uranium projects in both Wyoming and South Africa. The Lance Projects, located in Wyoming, contain the largest ISR JORC-compliant resource in North America. The Company has devised a three-stage production plan for the project with Stage 1 (500,000 to 700,000 pounds of U3O8 produced per year) to commence in 2H 2015. Purchase agreements with major U.S. energy producers are already in place for 2015-2024.
    Peninsula holds a 74 percent interest, covering 41 prospecting rights, in the Karoo Projects in South Africa. A positive scoping study has been recently completed with a pre-feasibility survey underway.

    Gus Simpson – Executive Chairman
    Mr Simpson is both a Science and Arts graduate from Curtin University, Western Australia. He joined the Peninsula Board in August 2007 and has over 25 years of experience in the management of listed mineral companies. He has had principal involvement in a number of successful mineral discoveries in Africa, Australia and North America. Previously held positions include senior executive roles with Gindalbie Mining NL, Australian Minerals Sands NL, Panorama Resources NL and Tanganyika Gold Limited. Mr Simpson brings a high level of strategic commercial expertise to the company.
    Alfred Gillman – Technical Director
    Mr Gillman has over 25 years experience as a geologist in uranium, gold and base metals exploration. Mr Gillman has extensive uranium experience including the sandstone hosted deposits of the Karoo Basin in South Africa, Powder River Basin, Wyoming and the unconformity style deposits of northern Australia. Mr Gillman specialises in resource estimation and advanced computer modelling and since joining Peninsula has developed extensive knowledge of its projects, been instrumental in the delineation of the Company’s resources, led the development of the mineralisation / exploration models and has been serving as the Competent Person for both the Lance and Karoo Projects. For most of his career, Mr Gillman has held senior management positions including Group Exploration Manager of Harmony Gold. Mr Gillman is a Fellow and Chartered Professional of the Australian Institute of Mining and Metallurgy.
    Glenn Black – COO, CEO South Africa
    Mr Black is an engineer who has 36 years experience in the mining industry in senior management and operational positions, including extensive experience in mine/plant construction, project management, development and implementation. He has worked across a broad spectrum of minerals and in energy generation. Prior to joining Peninsula, Mr Black has been employed for the last 20 years with the De Beers Mining Group, most recently at Debswana Diamond Company, the world’s leading producer of diamonds by value, where he held senior construction, engineering and project management positions. Mr Black’s experience at De Beers included direct involvement in the building and commissioning of multiple mines, other plant and infrastructure.
    Ralph Knode – CEO North America
    Mr Knode has over 30 years experience in uranium exploration, property evaluation, mine construction and mine operations throughout North America, Kazakhstan and Australia. Prior to joining Peninsula, Mr Knode held senior management positions at Uranium One, most recently as Senior Vice President, Projects. For over 25 years Mr Knode held various mid level and senior management positions for Cameco’s USA subsidiaries Crow Butte Resources and Power Resources and JV Inkai in Kazakhstan. In these capacities, Mr Knode has been directly involved in the start-up and/or operation of five In Situ Recovery projects on three different continents.
    David Coyne – Chief Financial Officer
    Mr Coyne has over 20 years’ experience in the mining, and engineering and construction industries, both within Australia and internationally. Prior to joining Peninsula, Mr Coyne held senior executive positions with Australian listed companies Macmahon Holdings Limited and VDM Group Limited, and with unlisted global manganese miner Consolidated Minerals. Over the past 10 years, Mr Coyne has been directly involved in a number of equity and debt raising transactions and has been the project director on a company-wide systems implementation project. Mr Coyne has previously served on the Board of listed iron ore miner, BC Iron Limited, where he also held the role of Chairman of the Audit and Risk Committee.
    Mike Griffin – VP Permitting, Regulatory and Environmental Compliance
    Mr Griffin has over 35 years in the nuclear industry including safetly, health, environmental,radiation protection, permitting and regulatory affairs for uranium mining companies, uranium mill decommissioning, federal and commercial environmental reclamation and decommissioning projects, nuclear power plant waste management operations, and naval nuclear propulsion.
    Mike Brost- VP Geology North America
    Mr Brost is a professional geoligist with over 33 years ISR-specific experience includes geology management services from development and delineation drilling to wellfield operations, and reclamation.
    Jim Gulinger – Principal geological consultant
    A geologist with more than 31 years in the minerals industry, Mr Jim Guilinger has completed numerous mineral market studies, resource and mining investigations for clients and companies around the world. Prior to forming World Industrial Minerals, Mr Guilinger was Director of Exploration and Development in Mexico for Eldorado, and the mineral arm of Texaco. Mr Guilinger’s expertise is in managing precious, base, and uranium minerals projects from early exploration phase through reserve definition to feasibility study preparation.
    George Van der Walt – Independent Consultant
    Mr van der Walt has been working in exploration and project management for 9 years. His experience covers Bushveld, rare earths and uranium with some exposure to Witwatersrand gold and industrial minerals. Mr van der Walt is a director of Geo-Consult International (Pty) Ltd and has been involved in Peninsula’s Karoo projects since 2009 and has extensive experience in the Karoo uranium district.
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