DFS shows Lance ISL projects as 'globally competitive'

Monday, 15 August 2022

ISL - also known as solution mining, or in situ recovery (ISR) - involves recovering minerals from a suitable orebody by dissolving them and pumping the pregnant solution to the surface where the minerals can be recovered. Consequently, there is little surface disturbance and no tailings or waste rock generated. The orebody must be permeable to the liquids used, and located so that they do not contaminate groundwater away from the orebody. The choice of leaching solution - acidic or alkaline - depends on the geology of the ore, but leaching using an acidic solution gives higher uranium recovery with lower operating costs than alkaline leach.

Australia-based Peninsula wound down production from the Ross Permit Area at Lance during the second quarter of 2019 in preparation for the transition from an alkaline ISL method to low pH operations. The company's Lance projects (Ross, Kendrick and Barber) host a fully-permitted ISL facility and a JORC-compliant resource base of 53.7 million pounds U3O8 (20,655 tU).

The DFS is based on a total resource base of 21.8 million pounds U3O8 at the Ross and Kendrick production areas, which account for the majority of the Lance project's current Measured and Indicated Resources. The DFS excludes the contiguous Barber area with its 31.9 million pounds U3O8 resource base.

Key results from the DFS include a life-of-mine production of 14.4 million pounds of uranium over 14 years, a gross revenue of USD895 million and a steady production rate of 2 million pounds of uranium per annum from the fourth year of production. Economically, the DFS predicts a pre-tax net present value with a discount rate of 8% of USD125 million and a 43% internal rate of return based on an average sale price of USD62.38 per pound of uranium.

"We have been focused on methodically and efficiently applying the low pH ISR process to our flagship project," said Peninsula Managing Director and CEO Wayne Heili. "Peninsula has a unique competitive advantage in being the only US-based uranium company authorised to use the industry leading low pH ISR method. 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 (FID) 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."

Peninsula said its board anticipates considering an FID on resuming commercial production operations using the low pH ISR method in the second half of this year. "The decision will be based upon the conclusions of this DFS, prevailing uranium market conditions and project finance options," it added.