Peninsula Energy (ASX: PEN) has received a vote of confidence from its cornerstone investor Pala Investment Holdings Limited, which together with Peninsula's directors, will exercise its options expiring on 30 June 2012.
Pala has also agreed to underwrite the exercise of the listed options exercisable at A$0.03 that existing option holders choose not to exercise.
This is subject to Pala's total shareholding not exceeding 19.9% of Peninsula.
Lance project fast-track
Should all the almost 381.9 million options expiring on 30 June 2012 be exercised, Peninsula could be looking at a cash injection of about A$11.45 million, allowing it to fast track its Lance ISR Uranium projects in the Powder River Basin, northeastern Wyoming.
This includes the start of construction in the second half of 2012 and ordering of long lead time items of the Central Processing Plant prior to the issue of the NRC Source Material Licence.
Construction work will include installation and testing of a deep disposal well, installation of production monitoring wells as well as civil works for the Central Processing Plant.
These pre-licensing construction activities are permissible, subsequent to changes to the NRC guidelines, and will shorten the overall project development timeline.
" With debt financing advancing well, the underwriting of the options exercise will enable the company to commence construction at Lance and further reduce the project development time," Peninsula executive chairman John Simpson said.
"We welcome the continued support of our cornerstone shareholder, Pala, at this phase of development."
The company was recently the subject of a research report which placed a price target of A$0.08 ahead of first uranium production in 2013.
This is based on the 24.3% increase in its JORC-compliant uranium resource estimate to 51.5 million pounds U3O8 for the Lance Projects that it announced on 2 April 2012.
Peninsula has also upgraded economics for Lance, including a net present value (8%) of US$254 million, in its recently completed Feasibility Study and expects a review of its Ross ISR Uranium project licence application, its most advanced area at Lance, to be completed soon.
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