Peninsula Energy (PEN) - Solid DFS & Only 6 Months Construction Time

Interview with Wayne Heili, CEO of Peninsula Energy (ASX: PEN)

Our previous interview:    • Peninsula Energy (PEN) - Technical Analysi...  

Peninsula Energy Ltd. is an Australian advanced uranium developer focused on its Lance Uranium project located in Wyoming in the USA. The project is envisioned to implement a low-pH in-situ recovery process and also holds a JORC-compliant mineral resource estimate of 53.6 million pounds of U3O8 in the measured, indicated and inferred categories.

The company on the 15th of August 2022, published a Definitive Feasibility Study (DFS) for the Lance project, which is aimed at demonstrating the economic viability of the project as well as the robustness of the low-pH in-situ recovery process. The DFS covers the Ross and Kendrick Production Areas of the project which hold a total of 21.8 million pounds of U3O8. The project’s Barber Resource Area is excluded from the DFS but holds the potential to further add to the economics of the project with its 31.9 million pounds U3O8 mineral reserve.

The highlights of the DFS include a life of mine (LOM) of 14 years and a total production of 14.4 million pounds of U3O8. The gross revenue of the project is estimated to be USD$ 895 million, with a steady state production rate of 2 million pounds of U3O8 from year 4 onward. The project’s pre-tax net present value (NPV8) is estimated to be USD$ 125 million, with an internal rate of return (IRR) of 43%. The life of mine all-in cost (AIC) is estimated to be USD$ 45.74 per pound, with the project’s all-in sustaining cost (AISC) estimated to be USD$ 39.08 per pound.

The company will consider the final investment decision of the project by H2 2022, whilst continuing to advance the preparatory works of the project through its current cash holdings.

0:00 - Company Overview
1:18 - Reason for Putting out the DFS despite the Current Inflationary Environment
4:28 - Showing Everyone that Peninsula Energy is Ready for Production
6:15 - Key Numerical Values and Highlights in the DFS
13:00 - Reason for Leaving Barber Resource Area out of the DFS
14:09 - Taking Advantage of Better Market Opportunities
15:15 - Reason for Opting for Self-Sufficiency Route
16:56 - Strategy and Capital Allocation in Ramping Up a Large Land Package
19:23 - Strategies in Attracting Contracts
21:15 - Pricing Target with Consideration of All-in Sustaining Cost
22:23 - Difference in the Current Market before the Energy Crisis
24:15 - Connections in the Nuclear Utility Space
25:36 - Overview of Production Projections
28:00 - Protecting the Company during the Current Inflationary Environment
29:37 - Possible Challenges that may Come Up on the way to the Final Investment Decision
31:46 - Recognizing the Market Opportunities
35:25 - Perspective of the Effects of Rising Uranium Interests on the Other Energy Resources
36:54 - Outro

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