Peninsula Energy (ASX: PEN) has completed a further 118,300 feet of drilling across 112 holes at its Lance Projects in Wyoming, with high grade uranium once again intersected as the company works to upgrade the confidence of the resource.
Significant intercepts include:
- 42.5 feet at 322 parts per million (ppm) eU3O8 (GT 1.37) including 2 feet at 1,150ppm eU3O8;
- 6.5 feet at 1,780ppm eU3O8 (GT 1.16) including 6 feet at 1,910ppm eU3O8;
- 25.5 feet at 429ppm eU3O8 (GT 1.09) including 1 foot at 1,690ppm eU3O8; and
- 18 feet at 2500ppm eU3O8 (GT 0.90) including 2 feet at 1,150ppm eU3O8.
A total of 72 intersections greater than 100ppm were obtained and 11 holes reported multiple zones of stacked uranium. A total of 23 holes reported grade thickness (NYSE:GT) intersections exceeding 0.2.
Drilling has been focused on converting Inferred resources to the Indicated category in the planned Kendrick Production Unit located to the west of the Ross Production Unit.
Peninsula has further defined the roll front trends in the Mellot Ranch area, with indications that the M3 and M4 roll front trends represent the southern extensions of the K3 and K5 trends located in the central Kendrick area.
In addition to resource expansion drilling, Peninsula has completed a series of diamond core holes within the existing permit area, with the samples to be used for further metallurgical studies.
These holes have returned thick intervals of uranium mineralisation further confirming the potential within and adjacent to the Ross Production Unit.
Extensive strike length
Highlighting the sheer size of the mineralised areas at Lance, drilling in Kendrick area has previously identified the K3, K4, K5, K5A and K6 roll fronts, which merge in places to produce wide areas of continuous mineralisation.
This continuous mineralisation has been identified over a combined strike length of 22 kilometres with horizontal widths of up to 60 metres in the northern K5 area.
Current interpretations suggests that there is a total of 312 line kilometres of mineralised roll fronts in the greater Lance Projects and that the delineated mineralisation to date in the Kendrick roll fronts represent only 7% of the estimated mineralised roll front systems within this.
Peninsula's technical team has identified and priority ranked over 500 follow-up drill targets within the Lance Projects and estimated that these drill targets will form the basis for ongoing exploration for a staggering 5-10 years.
Monitor well drilling
Peninsula subsidiary Strata Energy has suspended resource drilling for several weeks as it completes multiple clusters of aquifer monitoring wells as part of the mine permit extension process.
This program is being undertaken to include the Kendrick Production Unit in the mine planning schedule going forward.
The process is expected to be completed relatively quickly.
The Lance ISR Projects currently host a JORC Resource of 51.5 million pounds uranium and is targeted for production in the second half of 2013, ramping up to 2.2 million pounds per annum from the first three production units.
Peninsula has outlined a target of 104 to 163 million pounds of uranium for the projects.
The company has identified 13 separate project areas, with only six expanded to date. The resource is open at depth and to the west.
A Feasibility Study, which excludes the vanadium credits, has estimated a pre-tax project cash flow of $906 million on revenue of $2.2 billion.
Peninsula remains well funded with $20.35 million cash in the bank at the end of the June quarter 2012.
Proactive Investors considers that the re-tracement of Peninsula valuation, while sectoral, has been over-done and the stock is now significantly undervalued. Given the strong project and resource metrics, we believe that Peninsula's valuation and share price of $0.027 will begin to creep up ahead of milestones in 2013.
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