UEC terminates Lance resin processing agreement

Peninsula made the decision in November 2022 to restart the Lance project, having transitioned to low-pH operations. The project last produced uranium in 2019, but the high-pH method in use at that time was delivering lower-than-expected recoveries of uranium. In the meantime, the company has carried out studies and field trials to support a transition to low-pH operations, which Lance is now fully permitted to use. The restart of Lance - which will be the first low-pH ISL uranium operation in the USA - had been imminent.

Since mid-2015, Peninsula and its wholly owned subsidiary Strata Energy has been party to a resin processing agreement under which loaded resins generated at Lance are treated at UEC's Irigaray Central Processing Plant to produce a finished yellowcake product.

However, UEC has now notified Peninsula that it is terminating the agreement, which contains a mutual 270-day notice of termination provision.

"Considering the unanticipated notice of termination, Peninsula will not plan to use UEC's resin processing capacity during the remaining term of the agreement," Peninsula said. "The company has instead adopted a plan to accelerate the in-house development of an expanded and fully optimised production plant to produce a high-quality yellowcake product free of impurities, aligning with the re-start of production at Lance."

It noted that this strategy "is likely to result in a significant delay to the previously announced imminent restart of production at Lance".

Peninsula added: "Initial analysis indicates the revised plan will ultimately deliver a faster ramp-up to full capacity under a more efficient and capital-effective operation. Implementing in-house processing from the start of production will ensure the company can independently execute its business plan which includes producing uranium at an expanded rate, without a reliance on services from industry competitors."

The company had anticipated a move toward in-house resin processing following about a two-year period of third-party processing. It said work has now started on requirements to bring forward this timetable for the construction of additional process plant circuits to enable in-house yellowcake production.

"Faced with the unexpected challenge of not being able to rely on the processing services of our long-term service provider, we are now recalibrating our business plan to operate independently from our industry peers and to bring forward the in-house capability to produce finished yellowcake," said Peninsula Managing Director and CEO Wayne Heili. "While a delay to our planned restart is disappointing, we anticipate emerging with an expanded production capacity and a lower operating cost profile because of this endeavour. We are also evaluating an accelerated schedule towards full capacity.

"Analysis of the impact of this action on operational plans and funding requirements are under way and we will keep the market posted on key developments as they occur."