Peninsula Energy Granted Permit To Mine For Ross Uranium Project

Peninsula Energy (ASX: PEN) has marked a milestone today in its rapid advance towards production at its Lance Projects with the granting of a Permit to Mine for the Ross Production Unit.

This is the second of three licences required for the advancement of the Lance Projects to production, which is targeted for the second half of 2013.

Gus Simpson, executive chairman, commented: "With the issuance of the WDEQ Permit to Mine, the Lance Projects continue to gain momentum toward production.

"Yet again, the project team and regulatory authorities have achieved a significant project milestone on time and without issue."

The Wyoming Department of Environmental Quality (WDEQ) granted the Permit to Mine for the Ross Production Unit to wholly-owned subsidiary Strata Energy.

Strata received the first licence, the Deep Disposal Well licence, in April 2011.

The final licence required before commencement of production is the Combined Source and 11e.(2) Byproduct Material Licence issued by the U.S. Nuclear Regulatory Commission.

Strata received the draft Source Material Licence for the Ross Production Unit in early November 2012, a month ahead of projections.

Having concluded the Permit to Mine licensing process, Strata can now focus its entire permitting efforts on completing the Source Material Licence application process.

Within the coming weeks, Strata will begin allowable construction, prior to receiving the final Source Material Licence, at the Lance Projects.

This will include the development of deep disposal wells, monitoring wells and central processing plant site and civil works.

Simpson told Proactive Investors today effectively the pre-Source Material Licence construction will shorten the entire time to production.

"The risk for us going to production is dramatically reduced by the grant of these licences."

Analysis

Having received the Permit to Mine on time and without any issues is a feather in Peninsula's MD Gus Simpson's cap. This is a key milestone to have achieved moving it closer to development and commencement of a commercial ISR mining operation at the Ross Project.

This is the second of three licences required for the advancement of the Lance Projects to production.

Peninsula can soon begin construction as it awaits the final key Source Material Licence.

There is renewed interest in Peninsula given its advanced pre-production uranium project as well as a resurgence in the uranium sector as key countries re-affirm their commitment to nuclear power post-Fukishima and uranium company valuations crept to historic lows.

Peninsula is a near term production company with production targeted from its Lance Projects in Wyoming in the second half of 2013 at an initial rate of 750,000 pounds of uranium per annum, ramping up over three years to 2.2 million pounds per annum.

The company is well advanced in project funding discussions, with Peninsula announcing earlier this year that several financial institutions were reviewing the Lance projects database.

Peninsula is also much closer to securing US$70 million in bonds to partially fund development with the Crook County Board of Commissioners voting unanimously to provide authorisation to proceed toward the issuance of the Crook County Wyoming Industrial Development Revenue Bonds.

Lance project funding is expected to be secured in the second half of 2012 and should see a further re-rating in the company, which is undervalued given the advanced nature of its projects and its ability to fill a gap in the projected uranium supply shortfall.

We can foresee the share price approaching $0.08 to $0.10 in the next six-12 months.

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