broker report_speculative buy 8.6c

Reposted with kind permission of Malcolm in the Middle.


Malcolm in the Middle - HC PEN Thread 17/6/2009
"Just tried my hand at copying and pasting...heres a brokers report just sent to me if if hasn`t been seen before"

PENINSULA MINERALS LIMITED
Initiation – Uranium Production by Q1 2012
We are initiating coverage on Peninsula Minerals Limited (“Peninsula”, “PEN”, “Company”) with a Speculative Buy rating and a 6 month price target of 8.2cps. The Company is targeting uranium production of 1.5 million pounds per annum via In-Situ Recovery (“ISR”) mining from Q1 2012 from its low cost Lance projects in the USA. From 2017, additional uranium production of 3 million pounds per annum is planned at its Karoo projects in South Africa. Both the Lance and Karoo project areas have considerable exploration upside potential, which will be tested by drilling over the next few years. Peninsula is well placed to benefit from expected bullish sentiment towards uranium through its low cost, near term production in the USA and is funded for the next phase of development/appraisal work due to a $6.6m placement with an additional $4.4m from a rights issue, subject to shareholder approval. Lance Projects – Ticks in All the Boxes
• Low Cost, Near Term Production – The Company is targeting production of 1.5mlb uranium by Q1 2012 via ISR mining. With start-up costs of ~US$50m and opex of US$15/lb, payout could occur within 1.5 yrs of first production.
• Resource Definition Risk Mitigated by Historic Drilling - Peninsula has 13 projects with uranium mineralisation defined by 5,036 historical exploration holes. The two most advanced projects, Ross and Barber, will form the focus of the near term drilling program. The Company aims to define an initial JORC resource by Q2 2010, targeting 15mlb by December 2010.
• Concept Proven by ISR Pilot Plant - Peninsula’s Ross project in Wyoming was the site of an historic production pilot plant, which operated successfully for 6 months prior to shutdown in the wake of the Three Mile Island incident.
• Location Amenable to Uranium Mining - The Lance Projects are located in Wyoming, which currently hosts 55% of US uranium production. All production in Wyoming is from ISR, where permitting has recently been simplified, allowing for application reviews by the Nuclear Regulatory Commission within two years.
• ISR Considered Environmentally Friendly - ISR is considered a more environmentally friendly form of uranium mining as it has a minimal surface footprint and also minimises airborne contaminants. The site of the historic pilot plant was also fully rehabilitated, which should assist with permitting by Peninsula for its planned operations.
• Exploration Upside of 50-76mlb – The Company estimates exploration upside of 50-76mlb at and in between the 13 Wyoming project sites.
• Near Term Catalysts – There are several near term catalysts, including: metallurgical results from 2008 drill program; commencement of drilling at Ross/Barber; initial drill results; ongoing leasing activity and initial JORC resource in Q2 2010.
Karoo Projects – 150m lb U3O8 Exploration Potential Peninsula’s Karoo Projects are located in South Africa and comprise six sites, which the Company believes have potential for up to 150 million pounds (“mlb”) of U3O8. Three of the projects have historic drilling control of >1,000 holes with uranium grades averaging 1,200-1,400 parts per million (ppm) and molybdenum grades of up to 4,000ppm. The historic drilling done by Union Carbide and JCI identified a non-JORC resource of ~8mlb U3O8.


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