Uranium Investing

Peninsula announced that it has entered into a long term uranium concentrate sale and purchase agreement with a major European utility and nuclear industry leader.

Newly minted US in situ uranium producer Peninsula Energy (ASX:PEN) has been producing better than expected results since it started its operations in Wyoming in December of 2015. Given that the company has been exceeding its own expectations, it should come as no surprise to investors that market participants have notices as well. On March 11, Peninsula announced that it has entered into a long term uranium concentrate sale and purchase agreement with a major European utility and nuclear industry leader.
The agreement brokered by Peninsula is for the sale and purchase of 4 million pounds of U3O8 from the Lance projects over a 10 year period beginning at the end 2020. The agreement also contemplates increasing the sale amount to 50 percent of annual production from 2026 onwards. And while the price and annual quantities are subject to commercial confidentiality, the company notes that the agreement has provided certainty of sale and a committed revenue stream.
Securing an agreement with a European utility is a substantial achievement for the company. As Managing Director and CEO Gus Simpson said in a company statement, “Peninsula is very pleased to execute this contract as it adds geographical diversity to our sales portfolio.”
In signing the sale agreement Peninsula has reached a major catalyst. The deal underpins stage 2 production levels as well as the company’s long term plan to become a significant and profitable global supplier of uranium.
Indeed, as Simpson highlighted “It is an important vote of confidence in our projects, management and ability to deliver uranium well into the future. In addition we have worked with the utility for several years during the evaluation period and we anticipate a long and mutually beneficial relationship.”
The latest sale and purchase agreement marks the fifth sales contract for uranium produce at the Lance projects that the company has under its belt so far. As Simpson told Investing News Network in a recent interview, “The reality is that production [at Lance] has come about for us because we had contracted this material prior to getting into production.”
Simpson added that the sales agreements have certainly “been a significant contribution to [the company’s] ability to attract the financing to get the development underway.” Clearly, Peninsula the previous sales contracts the company had signed have helped in solidifying the company’s position as a low cost producer, and made it easier for the company to attract other sales partners.
On the back of the news, shares of Peninsula have seen a nominal 3.75 percent increase. The company is currently trading at A$0.83.

Securities Disclosure: I, Vivien Diniz, hold no direct investment interest in any company mentioned in this article.
Peninsula Energy is a client of the Investing News Network. This article is not paid-for content



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