uranium spot crashes to 31.50, page-21

" As no details have been provided by the company on how this weighted average is calculated, there is a possibility that PEN will not be securing a price of $74/lb in their first few years of sales. "

Not that difficult to find if you cared to look binbin.

It was clearly stated in each announcement and presentation, including broker reports, it was based on the PFS data.
read here: http://www.asx.com.au/asxpdf/20110428/pdf/41y8lzl23878yy.pdf

No matter what you, or anyone else thinks or states to the contrary, they HAVE a firm contract in place based on the PFS. It is also at an "escalated fixed price", the escalation figure isn't defined but the average price assumption is as below.

They can make over 100% profit based on the current spot price. If goes to the 20's as some believe here they stand to make a very tidy profit with no production cost whatsoever and very little effort from their buyer from a desk.

Read on...

Revenues
"Sales of U3O8 are predominantly undertaken on a long term contract basis with prices determined based on pre-set formulae linked to the prevailing reported term and spot prices. For PFS modelling purposes, all production from the Lance Projects is assumed sold at a long term average price of US$74 per pound U3O8. Sensitivities have been incorporated into the model at various price ranges. Based on current long term prices and the consensus on future long term pricing, pricing in the range of US$65-75¹ per pound U3O8 has been used in the PFS model. (¹ Uranium price sources includes Ux Consulting; Trade Tech and ABARE)"
source: http://www.pel.net.au/images/peninsul---ieyoh.pdf