Peninsula pens sales agreement for yellowcake

Peninsula Energy (ASX:PEN) has signed a new sales agreement for the supply of uranium yellowcake through its wholly owned subsidiary Strata Energy, operator of the Lance Projects in Wyoming, US. 

The $232.11 million market capitalisation company says the new sales agreement requires that the company sells 1.2 million pounds of uranium over a 6-year period starting in 2028 to European nuclear fuel buyer Synatom. 

The agreement is subject to concurrence by the European Supply Agency (Euratom).

According to Peninsula, the contract is estimated to generate gross revenue between US$88 million and US$117 million over the term. 

With the inclusion of this new agreement, the company’s total contractual sales obligation over the upcoming 10 year period is 6 million pounds.  

The pricing structure of the agreement is a blended approach including both base price and market priced components. The wrestling price is projected to be well above the forecast production costs at Lance as reported in the August 2023 life-of-mine (LOM) model.

In the LOM model, the company projected production levels of about 14.8 million pounds of uranium during the same period. 

Peninsula Energy Managing Director and CEO Wayne Hill says: “The strength of the uranium market dynamics in recent months has allowed Peninsula to consider adding sales commitments with improved pricing structures to our sales portfolio. 

This new long-term agreement adds financial security to our uranium production facilities while capitalising on the current robust price environment. We are pleased to be establishing this relationship with another significant utility customer.”

Peninsula Energy is a uranium miner with its wholly owned Lance Project — one of the largest near-term uranium development projects in the US— sitting in Wyoming. 

The project is currently transitioning to a low-cost and environmentally friendly low pH ISR operation and, once back in production, will establish the company as a fully independent end-to-end producer of yellowcake uranium.

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Images: Peninsula Energy
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Written By Adam Drought
Born and raised in the UK, Adam is a sports fanatic with an interest in Rugby League and UFC/MMA. When not training in Muay Thai and Brazilian Jiu Jitsu, Adam attends Griffith University where he is completing his final year of a Communication & Journalism degree.