Peninsula bags US$56M for Wyoming uranium ramp up

ASX-listed uranium producer Peninsula Energy has put its foot on a US$56 million (A$77 million) funding package designed to accelerate mine development and ramp up production at its Lance uranium project in the US state of Wyoming.

The funding is a three-pronged affair, comprising a fully underwritten institutional placement to raise A$21.8 million, a fully underwritten entitlement offer for another A$14.2 million, and a binding commitment for a US$30 million (A$41 million) convertible note debt facility with veteran investment house Washington H. Soul Pattinson (Soul Patts). 

Peninsula says the cash injection will give the company flexibility to achieve its 1.2 – 1.5 million pounds per annum processing goal in a uranium spot price environment that looks ready to explode following a raft of Cameco closures in Canada’s famed Athabasca Basin. 

In a powerful endorsement of both its confidence in the company’s strategy and the uranium market at large, Soul Patts is not only providing the US$30 million debt facility but is also throwing its support behind the equity raise with a firm commitment for up to A$14.4 million. 

The funds will be used to fast-track the development of Mine Unit 5 at Lance, the first stage of Peninsula’s “Horizon 3” growth strategy – full-scale production from 2028. 

The cash injection will also fund construction of a new deep disposal well and pay down US$4.2 million in existing debt.

Peninsula says it has earmarked US$30 million for the development of Mine Unit 5, US$10.8 million for initial works on Mine Unit 6 and a further US$6.5 million for an additional deep disposal well. 

The latest strategy is to ensure a smooth transition and production ramp-up, minimising any potential output decline in late 2027 when the current Mine Unit 4 is depleted. 

Management says the funding allows it to begin planning and development of Mine Unit 5 immediately, an unfortunate but necessary pay now, benefit later scenario. 

The company has maintained its production guidance for the next two years, forecasting between 0.4 and 0.5 million pounds of U3O8 in 2026 and between 0.5 and 0.6 million pounds in 2027. 

Peninsula Energy managing director and chief executive officer George Bauk said: “This funding package provides the impetus for Peninsula to move swiftly into the next phase of growth at the Lance project. With ramp-up activities advancing, the acidification of Header House 14 progressing ahead of schedule and encouraging initial head grades, we are focused on laying the foundations for our next step-change in production growth.”

As one of America’s largest uranium in-situ recovery (ISR) operations, Lance hosts a 58-million-pound JORC-compliant resource across its Ross, Kendrick and Barber areas. 

ISR uranium operations pump solutions underground to dissolve the uranium before bringing it back to the surface for processing. 

The company notes that recent operational adjustments to its leaching chemistry have led to improved flow rates, although they have also increased acid costs across the project. 

With the world rediscovering its affection for nuclear power as a clean-energy source, the uranium market has been running hot. 

Securing a domestic supply chain is a top priority for the US government, even more so with uranium behemoths such as Cameco shutting down operations in Canada, placing projects like Peninsula’s Lance in a valuable position.

Having a clear, funded pathway to ramp up production is one thing. Having the project in a Tier-1 jurisdiction backed by heavyweight investor Soul Patts is another entirely. 

With its saddlebags now full, Peninsula has drawn a clear line in the Wyoming sand, marking its transition from developer to a more substantial producer.

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au