Peninsula Energy set to benefit from US Congress approval to fund establishment of US Strategic Uranium Reserve

Peninsula Energy Ltd (ASX:PEN) (OTCMKTS:PENMF) (FRA:P1M) and its wholly-owned US subsidiary Strata Energy welcome the US Congress move to fund the establishment of a US National Strategic Uranium Reserve, as part of the fiscal year 2021 budget, which now awaits the President’s signature. Once signed, the budget directs the US Department of Energy to allocate US$75 million towards the establishment of a program to operate a uranium reserve. Only a handful of companies will be able to supply material into the Uranium Reserve and Peninsula is the only ASX-listed company with immediate exposure to this opportunity. Major milestone Peninsula managing director and chief executive officer Wayne Heli said: “The Congressional approval of the Uranium Reserve is a major milestone for the US domestic sector and future development of the uranium industry. “The White House has indicated that the President will sign the Fiscal Year 2021 Budget shortly. “The US Nuclear Fuel Working Group (NFWG) continues to deliver on its recommendations outlined earlier in the year, which focused on supporting and advancing Nuclear Energy Initiatives across the country, including the establishment of the Strategic Uranium Reserve. “Only a handful of companies will be able to supply material into the Uranium Reserve and the company is fortunate to be on that shortlist. “Peninsula is the only ASX-listed company with immediate exposure to this opportunity.” Shares have been as much as 15 per cent higher intra-day to A$0.115. Significant impetus for US domestic industry The NFWG’s recommendations released in April 2020, included the direct purchases of uranium and nuclear fuel services to expand five-fold the American Assured Fuel Supply strategic inventory stockpile by purchasing 17 to 19 million pounds over a 10-year period of US-produced uranium (the Uranium Reserve). The approved 2021 US Budget includes funding of US$75 million for the Uranium Reserve. An initial US Senate proposal for the appropriation of Uranium Reserve-backed purchase of US-produced uranium was US$150 million, however, during budget negotiations, the Congress Budget adjusted the initial year funding to US$75 million. The approval of the revised amount still signals a significant impetus for the US domestic industry and the start of a longer-term program. Offtake agreement for Lance Projects The company believes the Uranium Reserve will provide a substantial opportunity for its Lance Projects in Wyoming to secure new uranium offtake agreements with the US DOE. Additional sales agreements are a key consideration in the company’s decision-making process on the restart of production activities at Lance. This would supplement the company’s existing portfolio of uranium concentrate sale agreements, which are with major utilities, totalling up to 5.5 million pounds uranium through to 2030, with a weighted average future sales price of US$51-$53 per pound. Low pH recovery operation Peninsula is the only ASX-listed uranium company that has the immediate ability to take advantage of outcomes from the NFWG, in the form of US government programs that support US uranium mines. The Lance Projects are in transition from an alkaline to a low pH in-situ recovery operation, the global leading method of uranium production.