Peninsula Energy continues to progress Lance Project development

Peninsula Energy Ltd (ASX:PEN) (OTCMKTS:PENMF) maintained three new full-scale in-situ recovery patterns at a total design flow rate of 75 gallons per minute during the December 2020 quarter at the Lance Project in Wyoming, USA. A low pH field demonstration began in the September 2020 quarter focusing on an unmined area of Mine Unit 1 (MU1A) and is expected to run for 12-18 months. The overall performance of the MU1A field demonstration to date has been meeting expectations with the groundwater system pH having dropped from more than 8 to below 4 en route to target 2 with bicarbonate eliminated from the production system. Stronger oxidants, as used in the laboratory studies, will be tested as a means to enhance the rate of oxidation change as necessary to achieve the ideal conditions for uranium solubility. The company’s available cash at the end of the quarter was US$8.4 million Only US project using industry-leading method Commercial operations were suspended midway through 2019, to allow the on-site team to focus on preparing for a transformation of Lance’s process chemistry applications. The Strata team has successfully obtained the necessary amendments to its regulatory authorisations which allow Lance to operate using a low pH ISR process in addition to the originally authorised alkaline ISR process. Around 57% of uranium produced globally in 2019 was extracted through the low pH ISR process. Companies which utilise this process operate within the lowest quartile of cash costs for global uranium producers. Importantly, Lance is the only US-based uranium project authorised to use this industry leading method. US Government prioritises focus on uranium During the December quarter, a major domestic sector milestone was achieved with the United States Government funding the establishment of a U.S. National Strategic Uranium Reserve as a part of the passage of the Fiscal Year 2021 Budget. The US budget directs the U.S. Department of Energy (US DOE) to allocate US$75 million toward the establishment of a programme to operate a uranium reserve. The uranium reserve is being established, with cross-party support, as a manifestation of the stated priority of preserving existing assets of U.S. nuclear infrastructure. In April 2020, the US Secretary of Energy released recommendations from the U.S. Nuclear Fuel Working Group (NFWG). The NFWG report stated that the U.S. government will take bold action to revive and strengthen the domestic uranium mining industry. Opportunity to secure new uranium offtake Peninsula believes that the establishment of the Uranium Reserve will provide a substantial opportunity to secure new uranium offtake agreements with the US DOE. Additional sales agreements are a key consideration in the Company’s decision-making process regarding 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. 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 actions that support US uranium mines. OTC Market Due to increasing North American based investor interest and following the end of the quarter Peninsula has started trading on the US OTC (over-the-counter) Pink Market under the code PENMF. Admission to the OTC Market is non-dilutive, as no additional capital is required to be raised and no new shares will be issued. An application has been submitted to upgrade its trading to the OTCQB Venture Market tier.