Peninsula Energy (ASX:PEN) has recorded high-grade, near-surface uranium intercepts from a re-logging of existing drill holes completed during December 2015 to February 2016 at the Rietkuil project area at Peninsula's Karoo Projects in South Africa.
Re-logging is occurring in areas that are outside the existing JORC resource of 56.9 million pounds of uranium defined in 2014.
Hence the re-logging and results obtained will be included in an update of the Karoo resource.
While Peninsula's uranium producing Lance Project in Wyoming is rightfully the focus of attention, with a NYSE MKT listing in train, Karoo could provide Peninsula with production from South Africa over time.
As well, it would assist to ease the burden of the chronic power shortages in South Africa.
Best intercepts from the re-logging included: 9.5 feet at 2,408 parts per million uranium oxide equivalent from 37.9 feet; 8.9 feet at 2,422 parts per million uranium oxide equivalent from 27.6 feet and 6.6 feet at 2,800 parts per million uranium oxide equivalent from 47.4 feet.
RSA on nuclear road
This upbeat news flow could not come at a more opportune time, as South Africa gears up for nuclear expansion to add to the two nuclear reactors which provide about 5% of the country's electricity supply.
In 2014, South Africa agreed to a US$10 billion nuclear contract with Russia's state nuclear energy firm Rosatom as a first step towards achieving South Africa's nuclear goals.
Peninsula's announcement comes just days after South African President Jacob Zuma committed to a target of 9.6GWe by 2030, with the first new reactor coming online in 2030.
South Africa's physical and psychological shift towards nuclear energy consumption should provide tailwinds for uranium mining in the country, creating an opportunity for the high-grade Rietkuil projects.
The Rietkuil project contains a resource of 23.3 million tonnes of ore containing 56.9 million pounds of uranium at a grade of 1,108 parts per million uranium oxide.
But given the expansive land package at Rietkuil, Peninsula has outlined an exploratory resource growth target of 250-350 million pounds of uranium.
While operations at Lance continue to be the focus for Peninsula, Karoo provides a very handy high grade project that is primed and likely timed to be developed as nuclear expansion momentum builds in South Africa.
A pre-feasibility study is underway.
The re-logging of earlier drill holes should result in a significant increase in the Karoo resource base. Activities supporting the application for the grant of a mining license for Karoo are continuing.
Peninsula's flagship Lance in-situ recovery project in the U.S. continues to perform to expectation.
The low cost ISR processing technique, as well as long term contracts struck by Peninsula when uranium prices were far higher provides the platform for Lance to be a highly profitable operation.
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