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Peninsula Energy In Milestone Decision To Proceed With A Commercial Mining Operation At Lance

Peninsula Energy (ASX: PEN) will proceed to a commercial mining operation at the Lance In-Situ Recovery (NYSEMKT:ISR) Uranium Projects in Wyoming, after the landmark decision was made by the board.

Gus Simpson, executive chairman, commented on the milestone:

"The formal decision to proceed to a commercial mining operation at Lance represents the completion of the pre-development stage at the projects.

"With financing advancing well and permitting progressing on schedule we are confident that Peninsula will be a uranium producer in the near term."

Construction at the Lance Projects is estimated at six-nine months commencing in the second half 2012, with first production targeted for 2013. Mining is subject to final permitting and project financing.

MAJOR NEWS PENDING: Peninsula added that it is anticipated that the results of the Feasibility Study will be published on or before the third week of April.

Lance delivers upgraded uranium resource

In some more good news for Peninsula, earlier in the week the company announced 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.

Resource breakdown

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.

Production plan

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.