Peninsula Energy’s plans to extend the Ross Central Processing Plant at its flagship Lance uranium project in Wyoming has hit a snag, with preproduction costs rising US$20 million beyond what was predicted by the company’s life of mine (LOM) study.
According to the timeframe suggested by LOM study – which begins in August 2023 and ends in the third quarter of 2025, when sustainable positive free cash flow should be achieved – overall group funding for the project will be US$100, up from US$5 million.
However, the company has ticked off one goal, appointing Samuel Engineering Inc and Samuel EPC LLC (collectively ‘Samuel’) as contractor for engineering, procurement, and construction services for the expansion of the Ross CPP.
Additionally, Peninsula said its higher capital requirements could be offset by factors such as uncommitted sales revenues – boosted by an improved uranium market – and other CAPEX and OPEX model assumptions.
The coffers have also been boosted by a capital raising in the first quarter of 2024, which resulted in a cash balance of US$49.6 million after March 31.
Managing director and CEO Wayne Heili said the company was in a strong position ahead of the planned extension at Ross CPP.
“The appointment of Samuel as our engineering, procurement and construction lead is an important step forward in preparing Peninsula to be a fully independent uranium producer,” he said.
“Concurrently, the Peninsula team is actively preparing new and existing wellfields and auxiliary surface facilities for the resumption of production.
“We eagerly look forward to the completion of the plant construction efforts which will conclude our pre-production activities.”
Lance Project is one of the largest US uranium projects in size and scale, with a defined JORC (2012) Resource of 53.8 million pounds of triuranium octoxide (U3O8).
Peninsula is trading down 8 per cent at 11c.