Peninsula Energy Advances Lance Uranium Project Through Early Commissioning Challenges

• Header House 14 at Mine Unit 4 completed acidification ahead of schedule, with peak uranium grades from individual extraction patterns exceeding 300 mg/L, the highest ever recorded at the Lance Project.
• Header House 16 is advancing through acidification ahead of plan, while Header House 15 has completed construction and is on track to commence acidification in early May.
• Lower-than-planned flow rates in parts of Mine Units 3 and 4, attributed to gas accumulation in recovery well pipelines, are being managed through reagent dosing adjustments and wellfield maintenance, with early responses described as encouraging.
• The Central Processing Plant's dual precipitation circuit was fully restored in early April following an approximately eight-week outage, with repair costs of roughly US$0.23 million covered under the construction contract warranty.
• CY2026 production guidance is maintained at 0.4 to 0.5 million pounds of uranium, with output expected to be weighted toward the second half of the year.

Peninsula Energy Limited (ASX: PEN, OTCQB: PENMF), through its wholly owned subsidiary Strata Energy Inc., is an Australian-based uranium producer centred on the 100%-owned Lance Uranium Operation in Wyoming, USA. The company recommenced dried yellowcake production in September 2025 under a revised operational plan that introduced low-pH in-situ recovery (ISR) operations, a revised wellfield design, and optimised production sequencing. One of the largest independent uranium projects in the United States, Lance is being developed to position Peninsula as a fully integrated domestic uranium supplier. The company retains only one remaining long-term sales contract commitment.

Lance Production Ramp-Up Progress and Mine Unit 4 Development

Mine Unit 4 (MU-4) is central to Peninsula's Production Reset Plan, with the company expecting it to contribute approximately 60% of forecast output for CY2026. During the March quarter, Header House 14 (HH-14) completed its acidification process ahead of schedule. Uranium grades in the later stages of acidification averaged above 40 mg/L, with peak readings from individual extraction patterns exceeding 300 mg/L, the highest grade concentration recorded at Lance to date.

Header House 16 (HH-16) is also progressing ahead of plan, reaching an average pH of 4.53 within three weeks of acidification commencing. Header House 15 (HH-15) has completed construction, with commissioning and internal circulation underway ahead of planned acidification in early May. The acidification methodology applied to HH-15 will incorporate adjustments developed from earlier wellfield operations.

Managing Director and CEO George Bauk commented: 

"A key milestone was the successful development of Mine Unit 4, which is expected to contribute approximately 60% of our forecast production over CY2026, and remains the cornerstone of the Production Reset Plan. Early results from Header House 14 have been particularly encouraging, with acidification progressing ahead of schedule and strong uranium grades achieved." 

Four header houses in MU-4 (HH-14 through HH-17) are scheduled for commissioning or ramp-up over the remainder of the year.

Wellfield Flow Optimisation and Gas Generation Management

Lower-than-planned solution flow rates were observed in parts of Mine Units 3 and 4 during the quarter. In MU-4, the flow constraints are associated with gas accumulation in recovery well pipelines, linked to hydrogen peroxide decomposition during the acidification process. The company noted that gas generation from excess hydrogen peroxide decomposition has been identified at other low-pH ISR uranium operations globally and is related to the ratio and timing of acid and peroxide additions. The flow constraints observed in MU-3 are described as more formation-related and distinct from those in MU-4.

In response, Peninsula reduced hydrogen peroxide dosing rates, adjusted reagent sequencing and ratios, applied acid treatment to extraction wells, and expanded wellfield maintenance activities including well stimulation and air development. Revised injection rates will be applied when HH-15 is brought online. The company noted that further adjustments to acidification and leach operations can be expected as additional operating experience is gained.

Managing Director and CEO George Bauk stated:

"We have already implemented a range of targeted adjustments, including optimisation of reagent dosing, refinements to acidification sequencing and focused wellfield maintenance. There is a good degree of confidence within the Company that these actions will improve flow rates and overall wellfield performance as we continue to ramp-up operations. Importantly, the recently encountered lower flow rates experienced in MU-4 are not the same issues experienced in MU-3, which are more formation related."

CPP Dual Precipitation Circuit Restoration and CY2026 Production Guidance

During commissioning, installation-related defects were identified in the agitator assemblies of both precipitation tanks at the Central Processing Plant (CPP). The CPP is where uranium-bearing solution from the wellfields is processed into dried yellowcake. Both units were removed, replacement kits were sourced from the manufacturer, and the circuits were reinstalled and commissioned in early April 2026. Repair costs of approximately US$0.23 million were covered under the engineering, procurement and construction contract warranty. The outage lasted approximately eight weeks, during which wellfield operations continued uninterrupted and uranium capture on ion exchange resin continued using available resin storage capacity.

During the outage period, Peninsula also completed re-coating of additional ion exchange and elution tanks and commissioned a small reverse osmosis plant to address elevated sodium and chloride levels in the site water used in the filtration cycle, which had been contributing to above-specification readings in the final yellowcake product. The CPP is now operating with full circuit functionality across all stages.

Despite the commissioning interruptions during the quarter, Peninsula maintained its CY2026 production guidance at 0.4 to 0.5 million pounds of uranium (U3O8). Production is expected to be heavily weighted to the second half of the year as Header Houses 14 through 17 are progressively commissioned and ramped up. The company closed the quarter with US$16.3 million in cash. Two partial conversions of the Davidson Kempner debt facility, totalling US$8.35 million, reduced the outstanding balance to US$4.2 million as of early April.

Outlook

Peninsula enters the June quarter with the CPP at full capacity and MU-4's lead wellfields in the production circuit. Planned near-term steps include the commencement of HH-15 acidification in early May, the transition of HH-16 into production within the following month, and continued construction progress on HH-17 and HH-18. At the Dagger Exploration Project, a review of existing drill data is ongoing to support future drilling, and WWC Engineering has been appointed to commence a Scoping Study to evaluate development options. Full-year production guidance of 0.4 to 0.5 million pounds remains in place.

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