Peninsula flags impairment up to $43m

Subiaco-based uranium company Peninsula Energy has flagged a write-down of between $US20 million ($29.2 million) and $AUS30 million ($A43.8 million) stemming from its Lance on-site recovery project in the US state of Wyoming.

Peninsula said the impairment was a result of the market capitalisation of the company over the past 18 months falling below the carrying value of Lance.

Following finalisation of the impairment expense, the carrying value Lance will be approximately the market capitalisation of the company as at June 30.

At June 30 its market cap was $A76.6 million, while it is currently hovering below $A45 million.

The company said that although the impairment expense will be a non-cash item, it is likely to have an effect on its existing convertible note debt facilities.

The company has a requirement to maintain a tangible net worth of at least $A80 million on each quarterly test date, and said it anticipates that it may not be able to meet this undertaking on the next test date scheduled for September.

“That could give rise to an event of default under the convertible note debt facilities, which could potentially result in the need to repay the debt prior to its scheduled April 2020 repayment date,” the company said.

It has $US17 million ($A24.9 million) in debts related to this undertaking.

Peninsula extracts uranium with a low pH solution instead of a volatile alkaline solution.

Shares in Peninsula were down 15 per cent at 12.30pm AEST to trade at 17 cents each.