bgf equities commentary 17_09_2010

BGF Equities, Reg Spencer
Peninsula Minerals Commentary on ASX Release 17/8/10


"Significant Resource Upgrade 67% Increase to 25 Mill. lbs (11,400 t U3O8) ISL Mine Life of > 10 Years Assured, at > 700 tpa U3O8"


"Comment:

* PEN is well placed to come on stream just when the megatons to megawatts program winds down, which will leave the USA scrambling to buy uranium from mine producers. Being in the US, and knowing the protectionism for which USA industry is notorious, PEN will have a sympathetic market on its doorstep.

* At the spot price of US$46/lb, the Operating Surplus could be A$40m p.a., but at the long term price of $60/lb it jumps to A$63m p.a. Given the market capitalisation is $61m today, the projected economics make the share look very cheap."


An assured 1.5M/lb p.a. (based on Ross and Barber alone), and they are building a 3M/lb p.a. plant.

"Potential for 72-120 Mlbs., based on the observation that the Lance Project covers at least 305 line km of known stacked roll fronts. Over 90% of the drilling has concentrated on the Ross and Barbara areas alone."