Peninsula Energy Release Rodman & Renshaw Report – Emerging ISR Producer with Scalability

Peninsula Energy (ASX:PEN) has released a Rodman & Renshaw Report highlighting the company’s Lance Projects located in Wyoming.
As quoted from the report:

Peninsula Energy presents a unique opportunity. Peninsula Energy, based in Australia, owns the Lance Projects located in Wyoming and is focused on developing an In-Situ Recovery (ISR) uranium powerhouse. In our view, the low cost ISR processing technique, coupled with high priced long-term contracts positions Peninsula as a viable uranium producer despite spot uranium prices hovering around $35 per pound. Management began signing longterm contracts for production at Lance in 2011 when uranium prices were significantly higher than today. The firm currently has contracts in place totaling 7.8 million pounds at an average price of $59 per pound through 2020. Therefore, the average price Peninsula is expected to receive throughout the remainder the decade is significantly higher than the current long-term price of approximately $45 per pound, which we feel locks in margin and de-risks operations as a whole. In our view, Peninsula’s long-term contracts and low cost ISR operations position the firm to thrive despite lower spot uranium prices.
First production was reached in 2015. In December 2015, the firm brought its Ross Permit Area (located within the Lance Projects) online with ISR production commencing. We currently estimate average cash costs of just $22 per pound during Stage 1, generating an impressive gross margin of approximately 63%. Further, Lance hosts a significant resource base totaling 53.6 million pounds, including 4.5 million pounds in Measured, 12.6 million pounds in Indicated and 36.5 million pounds in Inferred resources. We note that while the majority of resources are Inferred, the firm currently has six drill rigs operating, which we feel could ultimately increase resources while upgrading the existing resource base.

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