Peninsula Energy (ASX: PEN) remains on the road to uranium production from the Lance Projects in Wyoming in 2013, (subject to regulatory approval), where the resource continues to grow.
The string of high grade results announced during early 2012 has provided a 24.3% increase in the total JORC Resource to 51.5 million pounds of uranium.
Just as important is the increase in the confidence categories, with a 30.7% boost in the Measured and Indicated Resource to 14.7 million pounds of uranium.
Also - the vanadium Resource increased to 4.9 million pounds V2O5.
Peninsula has been very clear in mapping the exploration road ahead, with two drilling rigs deployed in the Kendrick area drilling with one dedicated to the along strike exploration and one to intersecting the high-grade nose of the roll fronts.
Gus Simpson, executive chairman, commented on the positive news for the company: "We are very pleased with the resource upgrade and the ongoing success of the drilling program, particularly the outstanding results at Kendrick.
"The drilling continues to convert areas of mineral potential into JORC resources and to enhance resource status from Inferred to Indicated and Measured. This has added significant value to the Lance projects".
JORC Resource upgrade - the back story
Recent drilling focused on converting resources from Inferred to Indicated in the proposed Kendrick production unit, which is located to the west of the Ross production unit.
Peninsula said that drilling along the Kendrick roll front system is producing consistent thick high-grade intercepts, which has resulted in its prioritisation due to its resource expansion potential and its proximity to the proposed site of the Lance Central Processing Plant.
The drill density and demonstrated continuity of mineralisation at Kendrick has resulted in a high proportion of Inferred Resources being upgraded to Indicated category.
The resource has been calculated by applying a combined constraint of a grade thickness product (NYSE:GT) of 0.2 contour and 200ppm U3O8. These cut offs are considered to be appropriate for both calculating and reporting of in-situ recovery (NYSEMKT:ISR) resources at the Lance Project.
Within the Ross Production Unit there is a combined Measured, Indicated and Inferred Resource of 9.0 million pounds uranium with an average grade of 525ppm and an average GT of 0.55.
At Kendrick the combined Measured, Indicated and Inferred Resource totals 29.1 million pounds uranium at an average grade of 494ppm and an average GT of 0.47.
At Barber the combined Measured, Indicated and Inferred Resource totals 13.4 million pounds uranium at an average grade of 446ppm and an average GT of 0.43
Lance projects, development plan
The plan for the Lance projects To build a 2.18mlbs per year ISR operation inclusive of:
- Ion exchange facility, centralised resin stripping ,drying and packaging plant at Ross (NYSE:CPP).
- Remote ion exchange facility at Barber trucking resin to CPP.
Commence production in 2012/13:
- Phase 1 - 750klbs p.a. Ross production unit; Capex. $63 million.
- Phase 2 - 750klbs p.a. Kendrick production unit; Capex. $21 million.
- Phase 3 - 750klbs p.a. Barber production unit; Capex. $60 million.
- Production expansion target of 3mlbs per year by 2017.