A definitive feasibility study (DFS) into the Ross and Kendrick production areas, at the Lance uranium project, in Wyoming, has proven positive for ASX-listed Peninsula Energy.
The DFS estimated that the two production areas could produce a combined two-million pounds of uranium a year at steady-state production from the fourth year of production, producing 14.4-million pounds of uranium oxide (U3O8) over an estimated 14-year mine life.
The study is based on a combined resource of 21.8-million pounds U3O8 for the Ross and Kendrick production areas.
The DFS estimated a life-of-mine capital cost of $290.6-million, with the Stage 1 operation requiring an up-front capital investment of $2.7-million and a wellfield replacement and sustaining capital expenditure of $16.3-million.
The Stage 2 plant and wellfield expansion would require a further $69.9-million investment, while the wellfield replacement and sustaining capital would require a further $196-million investment.
All-in sustaining costs for the project have been estimated at $39.08/lb.
The DFS estimated a life-of-mine operating cashflow before tax of $527.1-million, with the project’s net present value estimated at $124.8-million and its internal rate of return at 43%.
“We have been focused on methodically and efficiently applying the low pH in-situ recovery (ISR) process to our flagship project. Peninsula has a unique competitive advantage in being the only US-based uranium company authorised to use the industry-leading low pH ISR method,” MD and CEO Wayne Heili said.
“Based on the advanced development stage of the Ross production area, Peninsula has a rapid speed-to-market pathway opportunity that will allow the company to leverage current uranium market opportunities.
“Peninsula has been working towards a final investment decision in 2022 to recommence uranium operations at Lance, and completion of this DFS was a key deliverable to allow the company’s board and management to assess the economics and long-term potential of the project.”
Heili said that the DFS is underpinned by a quality resource and detailed technical evaluations, and that the results highlight the exciting economic potential of Lance.
“The feasibility conclusion is supported by a combination of very low capital intensity, low operating costs, competitive all-in sustaining costs, a short timeline to production and fully de-risked technical and regulatory regimes. Importantly, the results confirm that the company is exceptionally well positioned to move ahead towards a development decision within the current dynamics of the uranium market.
“The board is extremely pleased with the results and would like to thank our staff and contractors for their commitment and hard work. Importantly, the findings have re-affirmed that Peninsula possesses a globally competitive uranium production centre at the Lance projects and that the pathway back to production for Lance is well defined and low risk.”