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Peninsula Energy To Control Known Uranium/Molybdenum Deposits In Karoo Basin

Peninsula Energy (ASX: PEN) will acquire a 74% interest in 36 prospecting rights covering 5,600 square kilometres of the main uranium-molybdenum bearing sandstone channels in the Karoo Basin (to be known as the ARSA Projects) in South Africa.

Peninsula has entered into an agreement with ARSA to acquire their portfolio of uranium and molybdenum projects.

The ARSA projects comprise several large areas of mineralisation; one of which extends over a distance of 80 kilometres and forms the largest single body of known uranium molybdenum mineralisation in the Karoo Basin.

The Karoo formations which host the uranium and molybdenum mineralisation consist of alternating units of sandstone and mudstone, with the mineralisation being largely restricted to the sandstone units.

Uranium mineralisation forms within a system of inter-connected channel controlled pods or lenses up to 200 metres in width and up to 9 kilometres long.

Exploration conducted by Esso in the late 1970's at the projects included 8,500 drill holes, bulk sampling programs, open-cut and underground trial mining.

Gus Simpson, executive chairman, said that the acquisition provides the company with a significant uranium and molybdenum portfolio which adds substantially to its existing asset base in the Karoo.

Highlighting the potential of the area, at Site 22 (part of Peninsula's existing Karoo Project), the company has returned values of over 6,000ppm U3O8.

The acquisition also provides a second mining operation following the successful ramp up of Lance, located in Wyoming, U.S.


The consideration to be paid by Peninsula to ARSA for the acquisition is in two stages.

Share Consideration: $US5,000,000 in fully paid ordinary Peninsula shares the number of which shall be determined on the basis of the volume weighted average price of Peninsula shares over the thirty days immediately prior to the date of their issuance.

$US1,000,000 of the Share Consideration is payable within thirty days of the signing of the SPA. The remaining US$4,000,000 is payable within ten business days of the satisfaction of the conditions precedent to the Acquisition, as detailed below. The Share Consideration will be issued under existing LR 7.1/7.1A capacity.

Deferred Consideration: $US45,000,000 upon completion of a Bankable Feasibility Study on the ARSA projects and the securing of financing for 50% of the funding required to develop the ARSA projects to production (Financing).

Should Financing occur after 1 January 2016, an escalation factor will be applied. Peninsula, at its sole discretion, can elect to pay the deferred consideration in cash or Peninsula shares.

Share Purchase Agreement

Under the Share Purchase Agreement executed on 10 December 2012, Peninsula, through its wholly owned subsidiary Tasman RSA Holdings (Pty) Ltd has agreed to purchase 74% of the issued share capital of the Joint Venture Company which holds 100% interest in 36 prospecting rights.

The BEE partner, Lukisa Invest 100 (Pty) Ltd (Lukisa) holds the remaining 26% of the Joint Venture Company and has been engaged throughout the negotiation process. Lukisa has confirmed they are fully supportive of the acquisition.

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