The outcome of this is that the company will net around A$11.1 million which, along with debt financing, will enable the company to begin construction at its Lance uranium projects in Wyoming, which is scheduled for the second half of 2012.
It will also position Peninsula to potentially further reduce the development timeline of the project.
The capital injection increases Peninsula's cash reserves to nearly $25 million, which is around a third of its current market cap. Importantly, project funding negotiations are also well advanced.
Demonstrating the level of support the company continues to receive from investors, earlier this month cornerstone investor Pala Investment Holdings, together with Peninsula's directors, agreed to 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, subject to its total shareholding not exceeding 19.9% of Peninsula.
The Lance Projects host a JORC Resource of 51.5 million pounds of uranium and has a defined exploration target of 104 to 163 million pounds of uranium.
Importantly, there is plenty of potential for further exploration upside within the Lance project area, with 13 project areas identified and just six expanded to date.
Peninsula has also upgraded the economics for Lance, including a net present value (8%) of US$254 million, in its recently completed Feasibility Study.
Initial production of 750,000 pounds per annum will come from the Ross production unit, ramping up to steady state production of 2.2 million pounds per annum over three years with the inclusion of Kendrick and Barber.
Production is expected to feed into a central processing plant with an expandable capacity of up to 3 million pounds per annum. Vanadium will not be produced in the early stages of production from Lance.
Milestones to production
Investors can expect to see a number of near-term milestones reached by Peninsula as it heads towards production at Lance.
The second half of 2012 will be an extremely busy one with project funding, an upgraded resource for Lance, and key licences including a permit to mine all expected to be completed during the period.
Importantly, first uranium production is on track to begin in the second half of 2013.
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