Peninsula Energy (PEN) - Can Mobilise for Uranium Production in 30 days

Peninsula Energy Limited is an ASX-listed company that owns the Lance Uranium Project in Wyoming, the USA which is in transition from an alkaline to a low pH in-situ recovery operation, with the aim of achieving the operating performance and cost profile of the industry-leading uranium projects.

Matt Gordon caught up with Wayne Heili, CEO and Managing Director, Peninsula Energy.  Mr. Heili has spent the bulk of his 30+ year professional career in the uranium mining industry. Before joining Peninsula Energy, he served as President and CEO of Ur-Energy, Inc., where he successfully oversaw the design, construction, commissioning, and ramp-up of the Lost Creek in-situ uranium project in Wyoming, USA. Prior to joining Ur-Energy Inc, Mr. Heili served as Operations Manager of the Christensen/Irigaray in-situ uranium mines in Wyoming. He also has experience in ISR (in-situ recovery) and conventional uranium mines in Texas. His educational credentials include a Bachelor of Science degree in Metallurgical Engineering from Michigan Technological University. He is a past President of the Uranium Producers of America.

Company Overview

Peninsula Energy is an advanced uranium developer with projects based in the United States. The company was founded in 1993 and is headquartered in Australia. It is listed on the Australian Stock Exchange (ASX: PEN) and the OTC Markets (OTCQB: PENMF). Peninsula Uranium Limited, Beaufort West Minerals (Pty) Ltd, Strata Energy, Inc., PM Prospecting Pty Ltd., Tasman Pacific Minerals Limited, Tasman Mmakau JV Company (Pty) Ltd, Imperial Mining (Fiji) Ltd., and Tasman RSA Holdings (Pty) Ltd, are the company’s subsidiaries.

Peninsula Energy presents a unique opportunity in the current environment to invest in a uranium production and development company that has a ready-for-production project, a highly-experienced team, uranium sales contracts, along with a planned FID (Final Investment Decision) to restart the uranium project in the final part of Q4, 2022.

The FID will enable the company to get back into production. Notably, the Lance project was operational between late 2015 and 2019. Since its closure in 2019, the company has maintained the project. It has been restructuring the process chemistry and is looking at an FID in order to start operations.

The company published a DFS (Definitive Feasibility Study) on the Lance Project in August 2022. At the time, the company talked about its long-term capital needs to ramp up production to over a 2Mlb/year rate. The company isn’t looking to raise the full amount as it intends to restart the project at its current capacity, which requires significantly less capital.

Economics of scale plays into any mineral resource project. The more a company can produce, the better economies of scale it can realize. The company is looking to restart production to prove that it has the resources, team, and experience to produce. Currently, it is focused on getting the project started and acquiring the needed working capital to kickstart the project and carry out sustained production. It is also interested in signing sale contracts in order to deliver uranium to the market.

Following the FID, the company will be in a position to start the project. Throughout 2020, the company has been preparing and wet testing the well fields. It is ready to run the plant facility, which has been well-maintained since in closure in 2019. Once the FID is complete, the company will be conditioning the well fields and getting ready for commercial production in less than a month. The company anticipates that by the second quarter of operations, it will be reporting substantial uranium production.

The Market Landscape

Interestingly, Peninsula Energy is not concerned about the current market conditions as uranium offers tremendous opportunities for growth. The US government is looking to fund a number of domestic uranium production initiatives. At the same time, the US utilities are looking to diversify their uranium supply. The company has a contract base that supports its production decision. Throughout the course of 2022, the company has continued to de-risk the project, so that the FID would be an easy decision to make.

Over the last two years, the company has continuously worked on growing its US presence. Between 20%-25% of its share registry comprises North American investors. It is focused on the US investor market. The company anticipates that its’ US trading peers realize a premium compared to the valuations that it realizes today. There’s a lot of opportunity to grow its North American presence in the coming months. Peninsula Energy is ready for production and is relatively undervalued compared to its peers. It has contracts in place that will support ongoing production into the next decade.

The market expects that the company is planning to raise a significant amount of capital. However, these expectations are unfounded. The company has a great deal of confidence in its team and the staff that are responsible for getting the project back into production. Investors can find confidence in the fact that the company has been working on project preparedness for the past two years.

Peninsula Energy anticipates that the demand for uranium is going to far outstrip the supply. The company is focused on the speed at which it can ramp up the project in order to meet the market’s increasing demands. It is also looking at ways to fund the Lance project’s enhanced production capacity with its 50Mlbs+ uranium resource. Furthermore, the company is also considering adding other uranium production opportunities as a way to diversify operations.

While the company has continued to focus on its existing projects, it is also open to other opportunities. It has been looking at in-house opportunities to build its portfolio along with other ways to achieve growth. When it comes to organic growth, the company’s team has decades of experience with uranium production in the United States.

Targets 2022 and Beyond

Peninsula Energy’s team and experience make for a really good investment opportunity. The company does not intend on spending money on areas that aren’t very prospective. 2023 is expected to have a new complexion to it as the company seeks to ramp up production. At the same time, the company continues to explore other opportunities.

The company anticipates that the market will have sufficient funds available to support uranium projects. Furthermore, there have been a lot of uranium specialist funds that have heavily invested in the market in the last 3-4 years. The company believes that generalists will once again start investing in uranium. It anticipates that funds will also be available from new sources. Generalist funds are now beginning to recognize the opportunities presented by the nuclear space and the nuclear fuel cycle. They are now beginning to recognize the ability of US producers, including Peninsula Energy to put projects back into production. In the coming months, the company expects to be rewarded for its market position.

Peninsula Energy’s stock is heavily discounted at its current price. The market is yet to fully appreciate the company and its efforts. Due to this, the company is looking to demonstrate its capabilities to the market, which is expected to open a lot of new opportunities.

To find out more, go to the Peninsula Energy website