North American uranium hopeful Peninsula Energy has bolstered the mineral resources of two key areas within its flagship Lance projects in Wyoming, US, by nearly 20% — less than a week after it kicked off construction on a new processing plant.
The Ross and Kendrick zones of the wider project — which are the subject of Peninsula's life-of-mine feasibility work so far — now carry combined resources of 26.2 million pounds of yellowcake, up from the last estimate of 21.2Mlbs.
They support a wider new resource for the Lance project of 52.6 million tonnes grading 0.05% for 58Mlbs of contained uranium, with around 73% of the overall tonnes in the indicated category.
It's a somewhat marginal increase in the global Lance resource, with the former 2022 estimate at 51Mt grading 0.048% for 53.8Mlbs of uranium.
In any case, Peninsula said it planned to keep drilling through the rest of 2024 to further grow its Lance uranium resources as it worked to restart in-situ recovery at the Wyoming asset.
Construction underway
Earlier this month, Peninsula's engineering, procurement and construction contractor, Samuel, officially started construction on the Ross central processing plant within Lance, which is designed to enable production of up to 2Mlbs a year of yellowcake from the project.
The existing plant at the Ross zone has already been modified to allow for low-PH ISR, with the expansion to boost production rates.
Peninsula said the Lance construction and wellfield development projects remained on track for commissioning in late-2024.
A US$20 million cost increase for the construction of the plant, flagged by Peninsula in April, did not deter the uranium developer from pressing on with construction work to meet its goal of generating free cashflow from Lance before the end of September 2025.
Based on feasibility working using the previous 2022 resource estimates, the Ross and Kendrick zones are forecast to produce 14.8Mlbs of uranium oxide over a 10-year mine life at all-in sustaining costs of $42.46/lb.
Assuming a uranium price of $67.07/lb, this would translate to life-of-mine revenue of just under $1 billion. Uranium prices have been above $90/lb in recent times.
Peninsula pegged a full development price tag of $285.8 million on the project.
It had just under $50 million cash at the end of March, with just under half of the 14.8Mlbs of planned production contracted in offtake deals.
The company has not yet calculated how the bolstered Ross and Kendrick resources could impact Lance's financial metrics.
Shares in Peninsula Energy were up slightly in morning trade on Monday at A12c, capitalising the stock at $238 million. It's traded between 7.6c and 20c over the past year.
