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Peninsula Energy Powers Up High Grade Uranium Mineralisation At Karoo

Peninsula Energy (ASX:PEN) has confirmed further high grade uranium mineralisation at the Rietkuil project area of its Karoo Projects in South Africa that will add to existing JORC Resources.

Radiometric re-logging of existing Union Carbide Exploration Corporation (UCEX) drill holes has reinforced the shallow high grade mineralisation at Rietkuil.

It has also successfully validated the location and grade of the mineralisation that was delineated by UCEX in the 1970s.

This work is located outside the existing JORC Resource and will be included in a recalculation of the JORC Code-compliant Resource estimate for the Karoo Projects following any additional evaluation work that may be required.

Over the next 3-5 years ongoing exploration drilling and historic hole re-probing is proposed to expand the JORC resource within the Exploration Target areas.

This initial 3-5 year program will be mainly focussed on the Eastern Sector Ryst Kuil channel and Rietkuil area.

Exploration activities will mostly comprise geophysical logging and geochemical sampling of additional drillholes, ground-based prospecting and geological mapping.

Testing of the Western Sector Exploration Target areas, utilising the same exploration techniques, will most likely commence during following 5-10 year period.

Rietkuil Project Area

Radiometric reclogging of existing drill holes at the remaining Blocks F(NYSE:N), E(N) and E(NYSE:S), delivered very high grades at shallow depths, returning 29 significant intersections from 112 holes re-logged since November 2014.

Notable results include:

- 3.6 feet (1.1 metres) at 5,618ppm eU3O8 from 42.3 feet;
- 3.6 feet at 3,516ppm eU3O8 from 21.7 feet;
- 3.3 feet at 3,531ppm eU3O8 from 27.2 feet;
- 2.8 feet at 3,627ppm eU3O8 from 19.9 feet; and
- 3.0 feet at 3,282ppm eU3O8 from 48.9 feet.

A total of 207 UCEX holes have been successfully located and re-logged to date at Rietkuil.

Rietkuil Deposit

The Rietkuil deposit was the first major uranium occurrence to be discovered in the Karoo by UCEX in 1970 and is located in the upper-most sandstones of the Abrahamskraal formation below the escarpment approximately 40 km west of the town of Beaufort West.

Uranium mineralisation is located mainly at the base of the two uppermost sandstones (of four) with higher grade mineralisation occurring preferentially in the thicker, more continuous sandstone units.

UCEX also conducted an open pit trial mining exercise at one of the nine mineralised blocks in 1977 during which 44,000 square metres of overburden were stripped, 14,000 tonnes of ore and 5,000 tonnes of waste were excavated and stockpiled on surface.

Karoo Uranium Projects

The Karoo Projects cover a significant proportion of the Karoo Basin Permian sandstones with an Exploration Target of between 250 million and 350 million pounds U3O8.

The current JORC compliant Resource of the Ryst Kuil channel alone, which represents the most completely drilled portion of the resources, comprises 18.5 million tonnes at 1,105ppm eU3O8.
Overall Resources are 23.3Mt at 1,108ppm, or 56.9 million pounds of contained eU3O8 at the 600ppm eU3O8 cut-off.

Uranium Market

The Kagoshima District Court's recent decision to reject a legal bid to block the restart of two nuclear reactors operated by Kyushu Electric Power Co. has eased the way for the resumption of nuclear power in Japan for the first time in more than a year and a half.

The government is looking to restart Japan's nuclear industry four years after a major earthquake, a 15-metre tsunami disabled the power supply and cooling of three Fukushima Daiichi reactors, causing a nuclear accident on 11 March 2011.

The restarts would be the first atomic plants to begin operating under tougher safety rules established by the Nuclear Regulation Authority, the agency established after the Fukushima nuclear accident.

In addition, the Chinese Government recently approved construction of two more units at the Hongyanhe nuclear power plant in Liaoning province, marking the first approval for new reactors in four years.

It continues to ramp up its nuclear energy program in line with its stated goal of increasing electricity generated from nuclear plants from the current 21 gigawatts to 58GW by 2020 and 150 GW by 2030.

In terms of reactors, China now has 24 reactors in operation, 25 under construction and 189 on order, planned or proposed.

Analysis

While Peninsula Energy is focused on bringing its Lance Uranium projects in Wyoming into production in 2015, the Karoo projects in South Africa have significant market value adding capacity - given the grade and shortage of power in South Africa.

The Karoo Projects carry a much larger tonnage potential than is found at Lance with a current JORC Resource of 56.9mlbs eU3O8 at a high grade 1,108ppm resource (cut-off 600ppm) and an Exploration Target of 250-350mlbs eU3O8.

The aim is to complete a DFS and reserve definition and build a mine by 2018. This could play into expected demand to fuel power supplies in an energy challenged jurisdiction.

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