(MENAFN- ProactiveInvestors)
’s () development of the Lance In-Situ Recovery Projects in Wyoming is continuing on budget and on schedule for first uranium production later in 2015.
The company is poised to become the ASX’s next uranium producer after raising $69.4 million in February 2015 to underwrite Lance into production.
Peninsula’s Lance Projects in the Powder River Basin have JORC ISR Resources of 53.7 million pounds of U3O8 the largest of its kind in North America.
It also has significant exploration targets estimated at 158 – 217 million pounds of U3O8. The Projects are fully permitted for U3O8 production at the rate of 3 million pounds per year and in Stage One will produce 500000 - 700000 pounds of U3O8 per year constituting 10% of U.S. U3O8 production.
The Project is scalable and can ramp up production to maximum permitted levels (3000000 pounds of U3O8 per year) as demand and pricing for U3O8 increase and maintain a mine life that will span many decades.
“Construction and development activities are progressing very well with all environmental and safety performance targets also being achieved” said Ralph Knode chief executive officer of Peninsula’s wholly-owned subsidiary Strata Energy.
“In parallel pre-operational submissions are steadily being checked off with the regulators and we remain on schedule for start-up of production operations later this year.”
Recent Progress
Wellfield development activities continue to advance with all 73 monitor and mining wells in the first mine production unit now installed.
Aquifer pump tests are underway and the first of four baseline water samples from these wells have been taken to develop site-specific ground water quality data.
Whilst pump testing is still in progress initial wellfield flow rates are consistent with rates expected during production.
Results of the aquifer pump tests and baseline water sample data will be submitted to the State of Wyoming and the US Nuclear Regulatory Commission (NRC) for review and approval prior to the commencement of production.
Following completion of the concrete foundations and slabs during April the externally-manufactured ion exchange columns have now arrived on site and installation has commenced in the Central Processing Plant (CPP).
Structural steel erection has now commenced for the CPP and site Administration Building.
A work-over rig has been mobilised to the Deep Disposal Well site to undertake well testing and completion activities.
Results from initial injection tests indicate that the well which was drilled to a depth of 8606 feet will provide adequate injection capacity for stage 1 operations at the Lance Projects.
The United States Environmental Protection Agency (EPA) has also granted final approval for Strata to construct two holding ponds in the Ross Project Area of the Lance Projects clearing another pre-operational requirement.
The approval is in response to the design report submissions made by Strata in May 2014 and November 2014 and rules that the holding ponds are designed in compliance with the US Code of Federal Regulations.
Analysis
Positive cash flow is on the horizon with on track to start uranium production from its Lance ISR Projects later this year.
The project is expected to have a mine life that will span many decades even at the maximum permitted production rate of 3 million pounds U3O8 per annum given its ISR Resource of 53.7 million pounds of U3O8 as well as exploration targets estimated at 158 – 217 million pounds of U3O8.
Adding further interest is the progress made with at the Karoo Projects in South Africa where recent radiometric re-logging of existing Union Carbide Exploration Corporation (UCEX) drill holes reinforced the shallow high grade mineralisation at Rietkuil.
This work is located outside the existing JORC Resource and will be included in a recalculation of the JORC Code-compliant Resource estimate for the Karoo Projects following any additional evaluation work that may be required.
Karoo already carries a much larger tonnage potential than is found at Lance with a JORC Resource of 56.9 million pounds eU3O8 at a high grade 1108ppm resource (cut-off 600ppm) and an Exploration Target of 250-350 million pounds eU3O8.
Proactive Investors has previously calculated an Enterprise Value attributable to Lance and Karoo and share price target for of $0.06 per share within 12-18 months.
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