Peninsula Energy Limited · ASX:PEN
Peninsula Energy — 2013 Mines and Money Conference London
39 slides from Peninsula Energy's conference presentation, Dec 2, 2013
Slide 1: Company Presentation ASX announcement cover letter
For personal use only 2 December 2013 Companies Announcement Office Via Electronic Lodgement COMPANY PRESENTATION Please find attached a copy of the presentation to be made by Peninsula Energy Limited's Executive Chairman, Mr John (Gus) Simpson at the 2013 Mines and Money Conference in London today.
Slide 2: ASX's Next Uranium Producer - 2013 Company Presentation
For personal use only ASX’s NEXT URANIUM PRODUCER 2013 Company Presentation
Slide 3: 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 4: Peninsula Overview & Highlights
Peninsula Overview & Highlights For personal use only • Peninsula will be the ASX’s next uranium producer with production from its Lance project in Wyoming • Peninsula has a low risk, low cost, clear path to production in 2014 • Significant operating margins achievable at the current Term Contract u
Slide 5: Corporate Overview
Corporate Overview For personal use only Capital Structure 1 year share price & volume history Shares on issue 3,041m Share price 2.5c Market capitalisation US$76m Available funds US$7m Enterprise value US$69m Shareholding % holding Pala Investments 19.85% BlackRock 10.00% Gus Simpson 3.61% AREVA 0.
Slide 6: Directors
Directors For personal use only Strong Board delivering competence, experience and drive Gus Simpson Strong strategic leader, extensive background in resources, corporate finance Executive Chairman and management; 25 years experience in USA, Asia, Africa and Australia Alfred Gillman Experienced geol
Slide 7: Company Overview
Company Overview For personal use only First production Q4 2014 from Lance, Wyoming Emerging uranium producer with established project pipeline • Flagship Lance Projects in Wyoming – construction commenced - completion planned Q3, 2014 • Karoo Project in South Africa – positive scoping study recentl
Slide 8: Our Business Plan
Our Business Plan For personal use only Production target of 8-10mlbs U3O8 – BEFORE 2022 • Mirror and meet requirements of the power utilities - Utilities want diversity and security of supply – Diversity & security = multiple suppliers with multiple uranium sources located in stable and secure coun
Slide 9: Uranium Mining in Wyoming
Uranium Mining in Wyoming For personal use only Wyoming very supportive of uranium extraction – 7 operating ISR mines (3 start ups 2013); 4 operating process plants and 2 in construction; multiple ISR projects in development 8
Slide 10: Lance Project Overview
Lance Project Overview For personal use only • Located in strong uranium mining jurisdiction • Proven ISR technology: – 7 mines and 4 ISR plants already operating in Wyoming & 2 more under construction – ISR produces 45% of the world’s uranium in 2012 – Constructing a 2.3mlbs per annum ISR operation
Slide 11: 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 12: Two Stage Production Ramp-up
Two Stage Production Ramp-up For personal use only 2.5 • Low-risk path to Ability to increase production on future production price increases 2.0 Stage 2 Annualised Production Rate (mlbs) Start • Lance cashflow positive 2018 or 2022 from Q4 2015 1.5 • Option to accelerate 1.0 expansion Stage 1 start
Slide 13: Lance – Strong Financial Returns
Lance – Strong Financial Returns For personal use only Strong economics: pre-tax IRR of 34% and average cash cost US$30.65/lb Key financial metrics Pre-tax NPV 8% US$328m Payback 3.4 years Cashflow positive Q3, Year 2 Pre-Tax IRR 34% Initial CAPEX 1 US$68m Financial Metrics – 2.3mlbs p.a. *US$ per a
Slide 14: Lance Capex Requirements
Lance Capex Requirements For personal use only Low capital intensity and staged capex requirements Process Plant & Wellfield CAPEX to design production US$ rate by Production Unit To be funded by Ross Production Unit (2014 / 15) (1,150klbs p.a.) $68m project finance debt facility & equity Kendrick P
Slide 15: Lance Project Funding
Lance Project Funding For personal use only Pre-Licence Construction Funding • $22m in senior secured notes from BlackRock for pre-licence construction • First drawdown occurred in October 2013 • Notes have a coupon of 11% Debt • Approx. $50-60m in senior debt planned • Discussions on senior secured
Slide 16: Lance Uranium Sales Strategy
Lance Uranium Sales Strategy For personal use only Strategic partnering Sales across multiple customers • PEN Marketing company formed – Spot Price $36.00/lb (up $1.50/lb Nov.) – Producer Term Price $50.00-69.80/lb • Planned sales structure – 40-50% to a strategic partner + investment – 30-40% to 3-
Slide 17: Lance – Strong Exploration Potential
Lance – Strong exploration Potential 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 potential 158-217mlbs U3O8 16
Slide 18: Karoo Projects Overview
Karoo Projects Overview For personal use only High grade U3O8 & Molybdenum in proven area • Located in the Karoo region of RSA, approx. 400km to 600km E- NE of Cape Town • Known uranium and molybdenum mineralised province • 7,800 km2 over Permian sandstones • 320 km2 of freehold land • Freehold land
Slide 19: Karoo Development Model
Karoo Development Model For personal use only High grade near surface mineralisation Work completed to date Current & future strategy Historic Completed 2011-12 2013-14 • Drill-defined 99mlbs U3O8 at • 1,245 holes re-probed or drilled • Positive Scoping study completed 1,050 ppm by Peninsula for QAQ
Slide 20: Karoo Scoping Study - Positive Results
Karoo Scoping Study - Positive Results For personal use only Positive scoping study completed Q2 2013 Pre-Feasibility study commenced Q4 2013 • Scoping Study completed on Karoo Eastern Sector Projects in South Africa – Combined open cast and decline mining – Alkaline preferred development path – Dec
Slide 21: Karoo Development Schedule
Karoo Development Schedule For personal use only Karoo Development target CY2016/2017 2010 2011 2012 2013 2014 2015 2016 2017 Resource Definition ✔ ✔ ✔ ✔ ✔ (JORC conversion) Internal Conceptual ✔ Study Ext. Scoping Study ✔ PFS/BFS Project Financing Construction Commissioning Production Expanded Reso
Slide 22: Uranium Production vs Consumption
Uranium Production vs Consumption For personal use only Uranium consumption has exceeded production for many years but recycled supplies have left the market in oversupply – sources of recycled materials are now almost exhausted Key sources of recycled materials nearly exhausted: • Down blended weap
Slide 23: Nuclear Power – The Best Solution
Nuclear Power – The Best Solution For personal use only Location of USA & Europe nuclear plants • Nuclear power provides the best solution for a non- polluting 24:7 base load power source • Over 400 existing nuclear plants, focused in Europe, North America, Russia, South Korea and Japan • 1.7 billio
Slide 24: Global reactors: Growth & Uranium Demand
Global reactors: Growth & Uranium Demand For personal use only Electricity Generation and Uranium Consumption • Global Nuclear Generation Capacity will increase 67% over the next decade - from 374,108Mwe to 623,662Mwe • 67 Reactors under construction & 165 new Reactors planned • Annual Uranium Deman
Slide 25: Chinese Nuclear Generation 2012-2020
Chinese Nuclear Generation 2012-2020 For personal use only Between 2010 and 2012, China purchased ~$12B of U3O8 China’s demand for U3O8 is forecast to increase over 19 times by 2020 Source: World Nuclear Association; China Guongdong Nuclear Power Corporation; China National Nuclear Corporation. 24
Slide 26: Investment Highlights
Investment Highlights For personal use only Major sector and company re-rating expected from uranium supply changes combined with Peninsula commencing production • Peninsula will be the ASX’s next uranium producer • The Company has a low risk, clear path to production • Lance project will be a low c
Slide 27: Appendix
For personal use only Appendix
Slide 28: Lance JORC Resource
Lance JORC Resource For personal use only Grade eU3O8 Mineability eU3O8 Recovery Recovered Classification Tonnes (ppm (lbs) factor (lbs) factor eU3O8 (lbs) U3O8) 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 12,640,951 M+Ind 15,675
Slide 29: Lance Development Model
Lance Development Model For personal use only Proven technology – ISR produces 45% of world uranium • ISR is a low cost non-disruptive method of recovering uranium as yellow cake • Building a 2.3mlbs per year ISR operation • Inclusive of – Ion exchange facility – Centralised resin stripping, drying
Slide 30: Lance ISR Process Flow
Lance ISR Process Flow For personal use only Proven technology: 4 operating ISR plants in Wyoming & 2 more under construction 29
Slide 31: Lance – Permitting Schedule
Lance – Permitting Schedule For personal use only Permitting ahead of regulatory schedules Key: Black = granted Blue = awaiting final grant • NRC Source Material Licence − Technical reports completed − Environmental reports completed − Licence application deemed complete − Environmental and technica
Slide 32: 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 33: Management
Management For personal use only Uranium marketing & utility experience Management – South Africa Glenn Black Senior management engineer; 30 years experience with De Beers in mine construction and COO, CEO South Africa operations in Africa John Simpson Senior mining engineer , 40 years experience, 2
Slide 34: Karoo JORC Resource
Karoo JORC Resource For personal use only Maiden JORC compliant Resource January 2013 Large resource potential – 100+ year mine life eU3O8 (ppm) Tonnes eU3O8 eU3O8 Classification CUT-OFF (millions) (ppm) (million lbs) Indicated 600 6.9 1,020 15.7 Inferred 600 14.8 1,050 34.4 Total 600 21.7 1,040 50.
Slide 35: Karoo Development Model
Karoo Development Model For personal use only Conventional open pit and decline mining • Multiple production faces Open Pit and Decline Mining with central processing facility at Rystkuil • All sites within hauling Alkaline Added Water Added distance • Planning development in 2016/2017 • Continue to
Slide 36: Implied Market Valuation
Implied Market Valuation For personal use only Successfully delivering production pounds should result in a significant re-rating Peninsula Energy indicative market valuation as a function of production: Production Market cap Pre-Fukushima Market cap Company 2011A Market cap (US$/lb prod) market cap
Slide 37: Power Generation and Industrialisation
Power Generation and Industrialisation For personal use only • The 19th century industrial revolution in Western Europe and North America saw 200 million people move from an agrarian based economy to a urban/industrial world. It was followed by the eradication of famine and epidemics and it precipit
Slide 38: Power Utilities Construction Cost
Power Utilities Construction Cost For personal use only Power utilities concerns are around future supply & supply concentration When capex is included uranium is less than 2% of costs 37
Slide 39: 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
Peninsula Energy — 2013 Mines and Money Conference London on 6ix