Offtake Contract Cuts Signal Cautious Path as Peninsula Hits Yellowcake Milestone
Peninsula Energy has achieved a significant operational milestone with its first dried yellowcake production at the Lance Uranium Operation, while revising its near-term production guidance and completing a major equity raise to support growth.
- First dried yellowcake produced at Lance Uranium Operation, Wyoming
- Revised production guidance – up to 50,000 lbs U3O8 in 2025, scaling to 600,000 lbs by 2027
- Termination of five of six uranium offtake contracts to align with updated production plans
- Completed A$69.9M equity raise and US$15M convertible debt facility to fund ramp-up
- Board refresh with two new non-executive directors appointed and two long-standing directors retired
Operational Breakthrough at Lance
Peninsula Energy Limited has marked a pivotal moment in its development with the successful production of its first dried yellowcake at the Lance Uranium Operation in Wyoming. This achievement comes just 14 months after the start of construction on the expanded Central Processing Plant (CPP), underscoring the company's rapid progress in becoming a fully integrated uranium producer in the United States.
The production milestone was reached following a pre-operational inspection by the Wyoming Uranium Recovery Program, which approved the commencement of uranium-loaded resin processing in the new CPP expansion. During the September quarter, Peninsula dried and drummed 837 pounds of yellowcake, adding to an inventory of over 16,000 pounds by quarter-end.
Revised Production Guidance and Contract Realignment
Alongside this operational progress, Peninsula has undertaken a comprehensive review of its near-term production schedule, resulting in a more conservative production guidance. The company now expects to produce up to 50,000 pounds of uranium oxide (U3O8) in calendar year 2025, ramping up to between 400,000 and 500,000 pounds in 2026, and reaching 500,000 to 600,000 pounds by 2027.
To align with this revised outlook, Peninsula has mutually terminated five of its six uranium offtake contracts, removing previous delivery obligations that no longer fit the updated production profile. Only one contract remains, covering 600,000 pounds of uranium from 2028 to 2033, providing a degree of future revenue certainty.
Financial Strength and Corporate Renewal
Supporting its operational ambitions, Peninsula successfully completed a A$69.9 million equity raise and secured a US$15 million convertible debt facility from Davidson Kempner. The equity raise attracted strong backing from cornerstone investor Tees River Uranium Fund, which now holds an 18.4% undiluted stake, and new substantial shareholder Washington H. Soul Pattinson. These funds provide the financial flexibility to advance commissioning and ramp-up activities toward full production capacity.
The quarter also saw a refresh of the board, with the appointments of Keith Bowes and Tejal Magan as non-executive directors, bringing extensive resources and financial expertise. Meanwhile, long-standing directors Harrison Barker and Mark Wheatley retired, completing a planned leadership renewal.
Ongoing Development and Exploration
Operationally, the company is focused on increasing production from key wellfields, including Mine Units 1, 3, and the newly developed Unit 4, pending regulatory approvals. Acidification processes critical to in-situ recovery are underway, with further wellfield drilling planned to enhance resource confidence, particularly at the Dagger Exploration Project. A scoping study is also in progress to evaluate development options for this satellite project.
Safety performance remained strong with no lost time injuries, though a single reportable spill was recorded. The company ended the quarter with a healthy cash balance of US$36 million, positioning it well to navigate the next phases of operational scale-up.
Bottom Line?
With first yellowcake production achieved and funding secured, Peninsula Energy is poised for a disciplined ramp-up amid evolving market dynamics.
Questions in the middle?
- How will the termination of most offtake contracts affect Peninsula's near-term revenue and cash flow?
- What are the timelines and risks associated with regulatory approvals for wellfield acidification and expansion?
- How might the refreshed board influence strategic priorities and operational execution going forward?