Peninsula Energy Limited · ASX:PEN
Peninsula Energy — Investor Presentation (January 2015)
37 slides from Peninsula Energy's investor presentation, Jan 8, 2015
Slide 1: Fully Funded, Construction Underway, Production 2015
For personal use only FULLY FUNDED CONSTRUCTION UNDERWAY PRODUCTION 2015 January 2015 Presentation
Slide 2: Disclaimer & Competent Person
Disclaimer & Competent Person For personal use only This presentation is provided on the basis that the Company nor its representatives make any warranty (express or implied) as to the accuracy, reliability, relevance or completeness of the material contained in the Presentation and nothing containe
Slide 3: Enhanced Project Funding
Enhanced Project Funding For personal use only Original Senior Secured Debt Option Current Three Stage Mixed Financing Solution $173 million $173 million Debt : Equity ratio 60:40 Stage 1 $60m Equity $69m Equity (must be used first to build the project) Stage 2 $35m Debt $104m Debt Stage 3 $25m Debt
Slide 4: Investment Highlights
Investment Highlights For personal use only Major sector re-rating expected due to uranium supply contraction combined with increased new demand and utility contracting. Peninsula re-rating due to commencement of production 2015 • Project funding fully committed and secured • Peninsula will be the A
Slide 5: Drivers for Uranium Price Increase
Drivers for Uranium Price Increase • Demand For personal use only – 434 operating reactors consuming 200,000,000 lbs U3O8 annually – 72 new reactors under construction and will be online 2015-2019 each requiring 700,000 lbs or 50,000,000 additional lbs U3O8 annually – 163 new reactors planned and 32
Slide 6: US Uranium Forward Contracts
US Uranium Forward Contracts For personal use only 18-24 month nuclear fuel cycle means that contracting for natural uranium increases in H2 2014 and 2015 Forward coverage gap commences in 2016 & becomes more pronounced from 2017 6
Slide 7: US Purchases of Enrichment by Source
US Purchases of Enrichment by Source For personal use only • Significant dependency on Russian enrichment services • US enrichment capacity partly outsourced to Russia through HEU agreement and Russian Suspension Agreement for uranium 7
Slide 8: Corporate Overview
Corporate Overview For personal use only Capital Structure 1 year share price & volume history Shares on issue 5,477m Share price 2.0c Market capitalisation $110m Cash $54m Undrawn debt $18m Debt $1m Shareholding % holding Resource Capital Fund VI 20.9% Pala Investments 12.3% BlackRock Funds 9.3% J
Slide 9: Pro Forma Project Cash Flow
Pro Forma Project Cash Flow (All amounts are in NOMINAL terms) 2015 2016 2017 2018 2019 2020 2021 2022 For personal use only Production ('000 lbs) 100 650 800 1,250 1,750 2,350 2,350 2,350 Average Price per Pound Sold (USD/lb) * 53 56 60 64 67 67 70 Revenue (USD'm) 0.0 35.3 46.4 70.7 110.3 172.9 165
Slide 10: Pro Forma Balance Sheet – Post Entitlement Offer
Pro Forma Balance Sheet – Post Entitlement Offer For personal use only Assets A$'m Cash 54.1 • Fully funded to positive cash flow Other Current Assets 3.3 Non-Current Assets 112.6 Total Assets 170.0 Liabilities Current Debt 0.7 • Effectively debt-free Other Current Liabilities 0.9 Non-Current Debt 0
Slide 11: Company Overview
Company Overview For personal use only Emerging uranium producer with established project pipeline • Flagship Lance Projects in Wyoming – Fully Funded, Fully Permitted and construction commenced • Karoo Projects in South Africa – positive scoping study recently completed; PFS underway Lance: Wyoming
Slide 12: Lance Exploration Target Additional Disclosure
Lance Exploration Target Additional Disclosure For personal use only Exploration Target The Lance Projects cover a significant proportion of the Powder River Basin Basin Cretaceous sandstones of Wyoming, which are believed to represent an Exploration Target of between 158 and 217mlbs U3O8 which incl
Slide 13: Lance Exploration Target Additional Disclosure
Lance Exploration Target Additional Disclosure For personal use only Basis of Grade and Tonnage Range Determination With a database of approximately 7,500 drillholes together with several decades of geological research the level of exploration activity on which the Exploration Target is based, is co
Slide 14: Karoo Exploration Target Additional Disclosure
Karoo Exploration Target Additional Disclosure For personal use only Basis of the Exploration Target The Exploration Target is based on a combination of Exploration Results and proposed exploration programs. Please note that in accordance with Clause 17 of the JORC (2012) Code, the potential quantit
Slide 15: Karoo Exploration Target Additional Disclosure
Karoo Exploration Target Additional Disclosure For personal use only This resource tonnage is distributed over a cumulative strike length of 23km representing approximately 0.80 million tonnes/km. The Exploration Target is based on a combination of: • the total cumulative prospective strike length o
Slide 16: Management
Management For personal use only Team already in place to support Peninsula as a producer Management Corporate & USA Gus Simpson Strong strategic leader, extensive background in resources, corporate finance and Executive Chairman management; 25 years experience in USA, Asia, Africa and Australia Alf
Slide 17: Uranium Mining in Wyoming
Uranium Mining in Wyoming For personal use only Wyoming very supportive of uranium extraction – multiple ISR operations in region 17
Slide 18: Lance CPP and Ross Project – Fully Permitted
Lance CPP and Ross Project – Fully Permitted For personal use only All licenses and permits to operate Lance CPP and to mine the Ross Permit Area are granted • WDEQ Permit to Mine − Technical reports completed − Environmental reports completed − Licence application deemed complete − Environmental an
Slide 19: Rapid Resource Growth at Lance
Rapid Resource Growth at Lance For personal use only Resource grown from 5mlbs to 53mlbs U3O8 in 4 years: Modern delineation cost ~$1/lb Lance JORC Resource (U3O8 mlbs) 60,000,000 2,250 No. PEN Holes Inferred 1,854 4,738 No. NuBeth Holes1 4,738 50,000,000 Indicated Measured 1,106 4,738 40,000,000 80
Slide 20: Scalable Plant Development
Scalable Plant Development For personal use only • Scalable development plan for Lance Projects based on Equity funding for revised Stage 1 production rate 600,000 to 800,000 lbs U3O8 p.a. over 2015 - 2017 • Stage 2 development plan based on debt funding and construction in H1 2017 with additional p
Slide 21: Scalable Plant Conceptual Layout
Scalable Plant Conceptual Layout For personal use only Green = Stage 1 development Blue = Stage 2 & 3 development Red = Optional future equipment to increase CPP capacity to 3.0mlbs pa 21
Slide 22: Scalable Production Ramp–up: Stage 1
Scalable Production Ramp–up: Stage 1 For personal use only • Engineering design and re-specification completed by TREC in cooperation with the PEN production team • Behre Dolbear has completed an independent review of all changes and signed off on timing for Equity Funding Partners • Stage 1 product
Slide 23: Committed Funding for Stage 1
Committed Funding for Stage 1 For personal use only • $69.4 million underwritten institutional funding solution fully committed • $16.8 million placement to RCF Capital Fund VI (RCF VI) completed – RCF VI joined PEN register with initial 19.6% interest • $52.6 million Entitlement Offer to all existi
Slide 24: Use of Funds
Use of Funds For personal use only • Funds applied to 1. Repayment of BlackRock debt in full 2. Completion of stage 1 CPP construction 3. Deep disposal well 4. Wellfield development 5. Working Capital • Peninsula is fully funded to positive cashflow in year 2 • No equity required for stage 2 & 3 exp
Slide 25: Production Ramp–up: Stage 2 & 3
Production Ramp – up Stage 2 & 3 For personal use only • Stage 2 production rate of 1,000,000–1,200,000 lbs U3O8 p.a. for period 2018–2020 – Capital expenditure $35,000,000 (majority debt financed) – Elution circuit added – Drying and packaging circuit added – 7 additional header houses added – 1,70
Slide 26: Lance – Financial Returns
Lance – Financial Returns For personal use only Strong economics: IRR of 36% and average cash cost US$29.16/lb Key financial metrics Unlevered NPV 8% US$288m Cashflow positive Year 2 IRR 36% Stage 1 CAPEX 1 US$33m 1st Quartile All-in Costs @ 2.3mlbs p.a. *US$/lb Royalties and indirect taxes $6.28 Op
Slide 27: Lance – Exploration Target
Lance – Exploration Target For personal use only Large Resource potential: 70+ years mine life • 13 historic resources • 22 roll fronts extend for a combined linear strike length of 194 miles (312km) • Exploration target3 158-217mlbs U3O8 Please note that in accordance with Clause 17 of the JORC (20
Slide 28: Construction Activities
Construction Activities For personal use only • Review contractor bids • Install underground plumbing and electrical • Pour foundation and slab for CPP and Administration buildings • Erect Pre Engineered Buildings for CPP and Administration • Set tankage and pipe plant • Waste water pond • Deep Disp
Slide 29: Construction Activities – Completed Earthworks
Construction Activities – Completed Earthworks For personal use only 29
Slide 30: CPP Construction Activities
CPP Construction Activities For personal use only 30
Slide 31: CPP Ion Exchange Columns
CPP Ion Exchange Columns For personal use only 31
Slide 32: Well Field Installation
Well Field Installation For personal use only 32
Slide 33: Well Field Installation
Well Field Installation For personal use only • Mobilize drilling contractors • Finalize Mine Unit 1 monitor well installation • Abandon historic exploration holes within Mine Unit 1 • Perform aquifer pump tests • Collect baseline ground water quality samples • Regulatory review of Mine Unit 1 Well
Slide 34: Investment Highlights
Investment Highlights For personal use only Major sector re-rating expected due uranium supply contraction combined with increased new demand and utility contracting. Peninsula re-rating due to commencement of production 2015 • Project funding fully committed and secured • Peninsula will be the ASX’
Slide 35: Head Office
For personal use only Head Office Unit 17, Level 2 100 Railway Road Subiaco WA 6008 ASX’s NEXT Telephone: +61 8 9380 9920 Facsimile: +61 8 9381 5064 URANIUM Website PRODUCER www.pel.net.au Email contact info@pel.net.au
Slide 36: Appendix - Lance JORC Resource
Appendix 1 - Lance JORC Resource For personal use only Grade Recovered eU3O8 Mineability eU3O8 Recovery Classification Tonnes (ppm U3O8 (lbs) (lbs) factor (lbs) factor U3O8) 50.4% Measured 4,142,950 495 4,520,159 0.8 3,616,128 0.8 2,892,902 Indicated 11,532,135 497 0.8 10,112,761 0.8 8,090,209 12,64
Slide 37: Appendix - Karoo JORC Resource
Appendix 2 - Karoo JORC Resource For personal use only JORC compliant Resource March 2014 Large resource potential – 100+ year mine life Classification eU3O8 (ppm) Tonnes eU3O8 eU3O8 CUT-OFF (million) (ppm) (million lbs) Indicated 600 8 1,242 21.9 Inferred 600 15.3 1,038 35 Total 600 23.3 1,108 56.9
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