Peninsula Energy Limited · ASX:PEN
Peninsula Energy — Investor Presentation (November 2016)
45 slides from Peninsula Energy's investor presentation, November 2016
Slide 1: A global uranium supplier positioned for growth
ASX:PEN A global uranium supplier positioned for growth November 2016
Slide 2: Disclaimer & Competent Person
Disclaimer & Competent Person 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 contained in the Presentation
Slide 3: Overview
Overview Uranium production commenced at its Lance Projects in 1Q 2016 • Stage 1 ramp-up successfully underway • Existing plant and infrastructure allows low risk, clear path to production expansion • 8.1mlbs U3O8 sold into forward sales contracts at US$54/lb; Insulates earnings against soft spot
Slide 4: Corporate Overview
Corporate Overview Capital Structure 1 year share price & volume history Shares on issue 178m Share price (24/11/16) $0.58 Price (A$/share) Volume (m) Market capitalisation A$103m 1.40 2.0 Enterprise Value A$127m 1.20 1.5 Cash and Security Deposits 1.00 A$7m (31/10/16) 0.80 1.0 Shareholding* Holding
Slide 5: Strategic Overview
Strategic Overview To be a uranium producer from multiple sources in established jurisdictions with low cost, long life mines delivering directly to utilities Production at Lance ISR • Construction completed on-schedule and on-budget project, Wyoming • Production commenced in Q1 2016 • Building to 2
Slide 6: Power Supply in Developed and Developing Economies
Power Supply in Developed and Developing Economies USA China Europe India Russia Middle East Korea/Japan Nuclear Plants Europe USA Korea/Japan Russia China India M. East Other Total Operating 144 99 68 36 35 22 1 43 448 Under Construction 4 4 6 7 20 5 4 8 58 Planned & Proposed 52 42 20 48 177 64 42
Slide 7: Uranium Supply and Demand
Uranium Supply and Demand • Typically uranium is purchased via private treaty agreements. These are effectively take or pay, 5-11 years duration and at a premium to current market • Historically term contract volumes far outweigh spot contract volumes but not from Q2 2012 – 2017 • From mid-2012 onwa
Slide 8: Historic Uranium Sales
Historic Uranium Sales Term and Spot Contract Volumes (mlbs U3O8) (USD/lb) 300 100 250 80 200 60 150 40 100 20 50 0 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Term Contracts (LHS) Spot Contract (LHS) Annual Uranium Consumption (LHS) Term Uranium Price (RHS) Source:
Slide 9: Kazatomprom to Balance the Market
Kazatomprom to Balance the Market U3O8 Klbs Kazatomprom’s Historical Production ~40% of world production 60,000 50,000 The key objectives of Kazatomprom’s strategy 40,000 include "…trebling the 30,000 company's value…" - Mr. Umirzak Shukeyev, Chairman 20,000 of Kazakhstan's Sovereign Wealth Fund 10,
Slide 10: Price Recovery
Price Recovery • Uranium price recovery will be driven by: – Increased Term Contracting due to Kazakh changes in sales & marketing strategy (SWF involvement) http://www.kazpravda.kz/en/interviews/view/transformation-of-kazatomprom/ – Increased enrichment activity which will lead to a normalisation o
Slide 11: Significant Price Uplift when Term Contracting Returns
Significant Price Uplift when Term Contracting Returns Rebased Commodity Price Forecasts 3.00 2.50 2.00 Met Coal (Jan '16) Iron Ore (Dec '15) 1.50 Nickel (Feb '16) Copper (Feb '16) Uranium (Nov'16) 1.00 0.50 -20 -15 -10 -5 0 5 10 15 Time from minimum price (months) • Met coal, iron ore, nickel and c
Slide 12: Lance ISR Project, Wyoming USA
. Lance ISR Project, Wyoming USA 12
Slide 13: Uranium Mining in Wyoming
Uranium Mining in Wyoming Wyoming is very supportive of uranium extraction with multiple ISR operations in the region 13
Slide 14: Lance Operational Performance
Lance Operational Performance Quarterly Production Pounds U3O8 60,000 50,000 53,635 40,000 30,000 28,856 20,000 10,000 9,193 209 0 Q4 CY2015 Q1 CY2016 Q2 CY2016 Q3 CY2016 • Consistent flow rates have confirmed permeability • Header house units 1, 2 and 3 average flow rate over target rate of 20GPM p
Slide 15: Lance Operational Performance
Lance Operational Performance • Wellfields Production for July – Sept. 2016: 53,635 lbs U3O8, Q3 up 88% on Q2 Ore body permeability is good, average flow rate for header house 1, 2 & 3 better than 20 GPM Ore body leachability is demonstrated Header houses 3, 4 & 5 online and ramping up − Hea
Slide 16: Substantial Offtake Contracts
Substantial Offtake Contracts 5-Year Offtake Contract Profile Klbs U3O8 800 600 400 200 0 2017 2018 2019 2020 2021 • Sales and deliveries 8.1m lbs U3O8 under contract; WAP $55/lb; Revenue US$445,000,000 Delivered a total 54,000 lbs to converter in May and September 2016 Delivered 105,000 lbs t
Slide 17: U3O8 Recovery Process
U3O8 Recovery Process Option 1 – Stage 1 In-House Toll Milling Dryer picture to MU1 HH1-4 be inserted here MU2 HH5-7 3,750 GPM flowrate Production capacity of 600,000 to 700,000 lbs U3O8 p.a. • 400,000 to 650,000 lbs p.a. contracted for delivery; low price for uncontracted production Option 2 – Stag
Slide 18: Interim Operating Strategy
Interim Operating Strategy Option 3 – Stage 1.5 In-House Toll Milling Dryer picture to MU1 HH1-3 be inserted here MU2 HH5-10 2017 average operational flow rate of c. 2,000 GPM Production rate of c. 300,000-500,000 lbs U3O8 1. Interim operating strategy until uranium prices start to improve 2. 2017 p
Slide 19: Planned Scalable Production
Planned Scalable Production Production Profile All In Cash Cost1 Klbs U3O8 60 2,500 PEN Weighted 50 Contract Price 2,000 US$/lb U3O8 Produced 40 Stage 3 Term Price 1,500 Stage 2 30 1,000 Stage 1 20 Spot Price 500 10 0 Stage 1 Stage 2 Stage 3 0 Stage 1 Stage 1.5 Stage 2 Lance Projects AISC Sales & Ma
Slide 20: U3O8 Interim Operating Strategy
U3O8 Interim Operating Strategy Pros Reduces OPEX costs Generates sustainable positive cash flow Slows down rate of ongoing wellfield development Preserve mineral resource for higher uranium price environment Ability to ramp-up production rate in a matter of months Ability to construct S
Slide 21: Lance – Exploration Target
Lance – Exploration Target Large Resource potential: 70+ years mine life • Current JORC-2012 Compliant Resource 53.7m lbs U3O8 • 13 historic resources • 22 roll fronts extend for a combined linear strike length of 194 miles (312km) • Exploration Target 158-217m lbs U3O8 Please note that in accordanc
Slide 22: Peninsula Uranium Limited
Peninsula Uranium Limited Sales and Marketing, London UK 22
Slide 23: Sales and Marketing Strategy
Sales and Marketing Strategy • Peninsula Uranium Limited (UK) – Peninsula has established Peninsula Uranium Limited (PUL), a dedicated uranium sales and marketing company – Peninsula MD/CEO has a hands-on and direct management role within PUL – PUL is responsible for arranging and administering all
Slide 24: Karoo Projects, South Africa
Karoo Projects, South Africa 24
Slide 25: Karoo Projects, South Africa
Karoo Projects, South Africa • Ownership: Peninsula 74% and BEE Partners 26% • Located approximately 400-600km E-NE of Cape Town • 4,650 km2 over Permian sandstones • 322 km2 of freehold land covers majority of historic mineralisation • Known uranium and molybdenum mineralised province • Scoping Stu
Slide 26: Peer Group Metrics & Conclusion
Peer Group Metrics & Conclusion 26
Slide 27: Relative Resource and Cash-Flow Metrics
Relative Resource and Cash-Flow Metrics EV/Total Resource (USD/lb) 5.00 4.00 (US$/lb U3O8) 3.00 Producer Average: 1.83 2.00 1.00 Average: 1.32 - Cameco Ur-Energy Denison Uranium NexGen Berkeley Fission Paladin Energy Toro Peninsula UEX Corp Manhattan GoviEx Mines Energy Energy Energia Uranium Energy
Slide 28: Investment Highlights
Investment Highlights Peninsula is ramping up uranium production at its Lance Projects The bottom line is insulated from spot price volatility with significant production volume in Term Contracts The Company has a low risk, clear path to production expansion Strong financial support from fir
Slide 29: Contact Details
REGISTERED OFFICE Unit 17, Level 2, 100 Railway Road Subiaco, Western Australia 6008 Australia www.pel.net.au info@pel.net.au FURTHER INFORMATION Gus Simpson Managing Director +61 8 9380 9920 Contact Details 29
Slide 30: Appendices
PENINSULA#, EN stern | Appendices
Slide 31: Appendix - Lance Exploration Target
Appendix 1 - Lance Exploration Target Additional Disclosure 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 includes 54ml
Slide 32: Appendix - Lance Exploration Target
Appendix 1 - Lance Exploration Target Additional Disclosure 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 considered
Slide 33: Appendix - Karoo Exploration Target
Appendix 2 - Karoo Exploration Target Additional Disclosure 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 quantity and gra
Slide 34: Appendix - Karoo Exploration Target
Appendix 2 - Karoo Exploration Target Additional Disclosure 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 of the und
Slide 35: Appendix - Lance JORC Resource
Appendix 3 - Lance JORC Resource Grade (ppm Mineability eU3O8 Recovery Recovered U3O8 Classification Tonnes eU3O8(lbs) U3O8) factor (lbs) factor (lbs) 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 12,640,951 0.8 10,112,761 0.8 8,090,209 Measured & 15,675
Slide 36: Appendix - Karoo JORC Resource
Appendix 4 - Karoo JORC Resource JORC Compliant Resource March 2014 Classification Cut-off: eU3O8(ppm) Tonnes (million) eU3O8 (ppm) eU3O8 (million lbs) Indicated 600 8.0 1,242 21.9 Inferred 600 15.3 1,038 35 Total 600 23.3 1,108 56.9 Classification Sector Cut-Off: eU3O8 (ppm) Tonnes (million) eU3O8
Slide 37: Appendix - Board of Directors
Appendix 5 - Board of Directors John Harrison, Non-Executive Chairman: Mr Harrison brings to Peninsula a wealth of experience and resource sector knowledge acquired over a 45 year career including 20 years of investment banking in London. During this time Mr Harrison has developed an extensive inter
Slide 38: Appendix - Management
Appendix 6 - Management Extensive experience in mine development & uranium sales Gus Simpson Strong strategic leader, 9 years working in all aspects of the uranium business, extensive background in Managing Director/CEO resources, corporate finance and management; 25 years’ experience in USA, Asia,
Slide 39: Lance Plant Housing
Lance Plant Housing Completed CPP building 39
Slide 40: Lance Plant
Lance Plant Pipe racks and ion exchange column Ion exchange columns Piping inspection Piping and valves from waste tank to DDW 40
Slide 41: Lance Plant
Lance Plant Resin transfer water pumps installed in CPP Chemistry lab Controls for carbon dioxide storage tank Spectrometer unit in chemistry lab 41
Slide 42: Well Field Development Drilling
Well Field Development Drilling Production well drilling 42
Slide 43: Well Field Development
Well Field Development Trunkline from CPP to well fields Inside header house Oxygen injection system Inside completed header house at first mining unit Main trunk-line installed from CPP to wellfields 43
Slide 44: Ion Exchange Columns
lon Exchange Columns PENINSULA ENERGY iver 44
Slide 45: Loaded Resin Trailer
Loaded Resin Trailer Resin Transfer Equipment 45
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