Peninsula Energy has resumed uranium production at its flagship Lance Projects in Wyoming after a five-year pause, marking a pivotal step towards becoming a fully independent uranium producer. The company also announced key executive appointments and progress on plant construction despite some cost overruns and operational challenges.
- Uranium production restarted at Lance Projects after five years
- Approximately 1,000 pounds of uranium captured in early operations
- New CEO George Bauk and COO Frederic Guerin appointed
- Central Processing Plant construction ongoing with expected completion in June 2025
- Anticipated onerous contract provision of up to US$5 million due to production shortfall
Restarting Production at Lance
Peninsula Energy Limited has officially restarted uranium production at its flagship Lance Projects in Wyoming, USA, after a five-year hiatus. Operations recommenced in December 2024 within selected areas of Mine Unit 1 (MU-1), marking a historic milestone for the company as it moves closer to becoming a fully independent producer of uranium yellowcake. Early-stage operations have already yielded approximately 1,000 pounds of uranium captured in ion exchange resins, with initial flow rates and grades meeting planned targets.
The restart leverages a low-pH in-situ recovery (ISR) process, a technique that aligns with modern environmental and operational standards. As preconditioning continues in additional Header Houses, production rates are expected to increase, setting the stage for a steady ramp-up throughout 2025.
Advancing Plant Construction and Wellfield Development
Alongside production restart, Peninsula is progressing with the expansion of the Ross uranium recovery plant and the construction of a new Central Processing Plant (CPP). The CPP expansion, known as Phase II, will enable the production of dry yellowcake, with the first dry product anticipated in the June quarter of 2025. Despite challenging weather and supply chain issues causing a delay from the initially forecasted March quarter completion, the company has secured a fixed lump sum contract for the CPP construction, with a total capital cost now projected at approximately US$49 million, reflecting a US$9.5 million cost overrun.
Wellfield development is also advancing, with additional drill rigs contracted to support production areas in Mine Units 3 and 4. Preconditioning activities have commenced in Header House 11, although initial delays were experienced due to commissioning challenges with acid storage and delivery systems.
Leadership Changes Signal Growth Ambitions
Peninsula has strengthened its executive team with the appointment of George Bauk as Managing Director and CEO, effective January 2025, and Frederic Guerin as Chief Operating Officer and Senior Vice President of Geology since November 2024. Bauk brings over 30 years of global experience across uranium and other critical minerals, with a strong track record in project development and capital raising. Guerin’s extensive technical expertise in uranium ISR operations is expected to enhance operational execution and safety standards.
The leadership transition follows the planned step-down of former CEO Wayne Heili, who will remain with the company as a Technical Advisor to support the commissioning and production ramp-up phases.
Contractual and Financial Considerations
While production has restarted, Peninsula anticipates a shortfall in uranium output relative to existing sales contracts, leading to an expected onerous contract provision of up to US$5 million in its half-year financial statements. Negotiations with counterparties are ongoing, and the provision may be reversed depending on final delivery schedules and quantities. The company holds an in-process inventory of over 15,000 pounds of dry yellowcake and ended the quarter with a strong cash position of US$44.9 million.
Peninsula also completed a 20-for-1 share consolidation in December 2024 to optimize its capital structure and appeal to a broader investor base as it transitions into production.
Looking Ahead
With uranium production underway and key infrastructure nearing completion, Peninsula Energy is poised to establish itself as a significant North American uranium producer. The company’s progress at Lance, combined with the high-grade Dagger Project nearby, offers a promising platform for growth amid increasing demand for clean energy fuels. However, the path to steady-state production and contract fulfilment will require careful management of operational challenges and market dynamics.
Bottom Line?
Peninsula’s uranium production restart and leadership refresh set the stage for growth, but execution risks and contract negotiations remain critical to watch.
Questions in the middle?
- How quickly can Peninsula ramp up production to meet contractual uranium delivery obligations?
- What impact will the US$9.5 million cost overrun have on overall project economics and financing needs?
- How will new CEO George Bauk’s leadership influence the company’s strategic direction and capital raising efforts?