Peninsula locks in big players in completed $70M raise

Peninsula Energy has pulled off a significant coup, completing a nearly A$70 million capital raise to fully fund its in-situ Lance uranium project in Wyoming. 

The milestone, that saw some big names enter its share register, caps a full operational and financial reset, positioning the company as a key supplier into a resurgent US nuclear industry that’s racing to rebuild domestic uranium supply.

The capital injection, which was formally completed yesterday, followed shareholder approval for the fully underwritten A$69.9 million equity raising, led by Canadian corporate advisor, Canaccord Genuity and local broker, Shaw and Partners. 

The raise was made up of a two-tranche institutional placement worth $21.9 million and a $48 million 1-for-1 entitlement offer priced at 30 cents a share.

The recapitalisation drew strong institutional backing, with specialist uranium investor Tees River uranium fund tipping in $22.5 million to become Peninsula’s 18.4 per cent cornerstone holder, while global financier Davidson Kempner converted US$3 million of its existing US$15 million debt facility into equity.

Well known investment fund, Washington H. Soul Pattinson of historic pharmaceutical fame, also added to its existing shareholding in the latest raise. 

Launched in 2019, the UK-based Tees River uranium fund has carved out a niche backing in the global push towards nuclear energy security and decarbonisation. At the helm is seasoned uranium investor Sean Benson – a driving force in the nuclear fuel-technology space and also coincidently, a board member of Rolls-Royce SMR, the small modular reactor arm of the iconic engineering powerhouse.

The company says the fresh cash injection, combined with its existing cash and debt facility, will be used to clear the final bills on its newly fired-up central processing plant (CPP), which has a 2-million-pound-per-annum capacity and clear some poorly priced legacy offtake agreements.

Originally commissioned in 2015, Lance successfully used an alkaline leach method to recover the uranium. However, with the uber-low price of uranium in 2019 starting to bite, the company made the strategic decision to focus on a transition to a lower cost, low-pH acid system, similar to its competitors. 

Test work in 2020 and 2021 confirmed the Lance ore responded perfectly to the newer processing method, although it took another four years of hard slog to re-engineer the wellfields, lock in funding and secure the all-important regulatory ticks before the company was able to finally fire production back up. 

A fourfold surge in uranium prices and a more nuclear-friendly US administration have also helped turbocharge Peninsula’s comeback.

Peninsula Energy managing director and chief executive officer George Bauk said: “The strong support we received as part of the equity raise underscores confidence in Peninsula’s revised production plan and management team and reflects broad recognition of our progress toward becoming a leading uranium producer.”

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

With its processing plant back online, Peninsula has reset its sights on a tighter, more realistic production plan, starting with 50,000 pounds of uranium in 2025 and ramping up to between 400,000 and 600,000 pounds a year through 2026 and 2027. By 2028, the company expects to be hitting full stride with annual output of up to 1.5 million pounds.

On the ground, a major operational overhaul has seen wellfield designs optimised, injection and production wells tightened from 100 to 60 feet apart, and flow-rate maintenance plans implemented to improve consistency and lower costs.

Meanwhile, development and feasibility studies are progressing at the company’s Kendrick and Dagger satellite projects, where further resource upgrades are expected to support future growth. At over 1000 ppm uranium oxide, Dagger represents a significant step change opportunity for Peninsula. It is a separate horizon to the north of the existing project that grades about half that amount.

With US energy policy now heavily focused on nuclear expansion, including plans to quadruple national capacity and ban Russian uranium imports, Peninsula’s timing could hardly be better.

Having emerged from its reset stronger, cashed up and now in production, Peninsula Energy now looks set to take its place among America’s next generation of uranium suppliers.

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