Peninsula Energy Limited · ASX:PEN
Peninsula Energy — Investor Presentation (August 2018)
29 slides from Peninsula Energy's investor presentation, August 2018
Slide 1: Unlocking the Full Potential
UNLOCKING THE FULL POTENTIAL Corporate Presentation │ Wyoming│ August 2018 PENINSULA ENERGY LIMITED ASX:PEN
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: Peninsula Energy's Defining Strengths
Peninsula Energy’s Defining Strengths World Class • Experienced technical, financial and commercial team Management • Building for the future today Large Scale • Long-life Lance Project in USA Project • Lance contains resources of 53.5M lbs of U3O8² Scalable • ‘Game Changing’ low pH lixiviant initia
Slide 4: Corporate Overview
Corporate Overview Capital Structure Share Price & Volume History Ticker: ASX:PEN Shares on issue* 234m Share price (1-Aug-18) A$0.330 Price (A$/share) Volume (m) 0.50 7.5 Market capitalisation (1-Aug-18) A$77m 7.0 0.45 6.5 Enterprise Value (1-Aug-18) A$83m 0.40 6.0 5.5 Available Cash (30-Jun-18) US
Slide 5: Strategy – Realizing the Inherent Value
Strategy – Realizing the Inherent Value • Develop and operate long-life, low-cost production assets underpinned by long-term product sales contracts Sales & • Valuable long term sales contracts provide financial foundation Marketing Source of current/ongoing cash revenues Core • Optimize current a
Slide 6: The Uranium Market
The Uranium Market U3O8 (m pounds) 300 250 200 150 100 50 0 2012A 2013A 2014A 2015A 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E Secondary Supplies Existing Mines Forecast New Mines Total Demand PENINSULA ENERGY LIMITED 6 Source: Trade Tech
Slide 7: Uranium Market Overview
Uranium Market Overview • The uranium market may have reached its tipping point • Uranium is sold in spot & term markets • Utilities have been buying from spot for several years • Spot market supply depth is being tested by producer/investor buying • Term market opening up • Both markets are still w
Slide 8: Market Rebalancing is Occurring Now
Market Rebalancing is Occurring Now • Both supply and demand factors point to rising prices Supply: Global supply restraint • The miners keep reducing production target levels – now off 30 M lbs U3O8/yr • 2018 production estimated at 135M lbs • Available inventory stockpiles are decreasing Demand: N
Slide 9: Nuclear Fuel Geopolitical Themes
Nuclear Fuel Geopolitical Themes • Increasing political activity involving nuclear fuel trade 1. Section 232 of the US Trade Expansion Act Petition • US Dept. of Commerce (DOC) commenced investigation on 18 July 2018 • DOC has 9 months to complete investigation and make any recommendations • US Pres
Slide 10: Lance ISR Project │ Wyoming, USA
Lance ISR Project │ Wyoming, USA PENINSULA ENERGY LIMITED 10
Slide 11: Lance - Our Flagship Project
Lance - Our Flagship Project Exceptional • Active uranium production centre in premier jurisdiction Asset • 53.5M lbs U3O8 JORC (2012) compliant resource base2 offers long mine life • ‘Game Changing’ low pH lixiviant initiative Redefining Success • Potential to transform Lance performance and cost p
Slide 12: Premier US Uranium Jurisdiction
Premier US Uranium Jurisdiction • Wyoming is a premier US uranium extraction jurisdiction, hosting multiple licensed facilities PENINSULA ENERGY LIMITED 12
Slide 13: District Scale Mineral Rights Holdings
District Scale Mineral Rights Holdings • Large JORC defined resource with substantial upside potential • Rights held for over 24 mile long N-S trend in known uranium district Exploration Target: 158-217m pounds U3O8 (169-196mt at 426-530ppm U3O8) Existing JORC Resource: 53.5m pounds U3O8 Please note
Slide 14: Lance - Steady Production Results
Lance - Steady Production Results • Consistent quarterly production rates • 38,001 lbs produced; 43,553 lbs dried & drummed in 2Q18 • Production in Mine Unit 1 significantly cutback to preserve more “pounds in the ground” for low pH operations • Tightly controlled production expenditures Quarterly P
Slide 15: Unlocking the Full Potential of Lance
Unlocking the Full Potential of Lance • Low pH ISR transformation initiative is being actively advanced High • Potential to transform the performance and cost profile Potential • Feasibility Study expected in September Quarter 2018 • Permit and licence amendments submitted to regulator and Short und
Slide 16: Why Change Now?
Why Change Now? • All 1st quartile uranium operations globally are in-situ recovery (ISR) facilities that utilize a low pH lixiviant • Low pH ISR leads the way U3O8 Price (US$/lb) Low pH ISR Production All other operations 90 80 70 60 50 40 30 20 10 0 0 20 40 60 80 100 120 140 160 U3O8 (mlbs) Data S
Slide 17: Timeline for Low pH ISR Transformation
Timeline for Low pH ISR Transformation • Low pH Transition CAPEX in MU1 and process plant to be carried out parallel to regulatory approval process • Low pH Transition CAPEX in MU2 can be carried out while low pH operations in MU1 are ramping up PENINSULA ENERGY LIMITED 17
Slide 18: Low Cost Transformation
Low Cost Transformation 1. CAPEX and OPEX • Feasibility Study to outline Lance life-of-mine economics nearing completion • Changing process chemistry, not the underlying processes • Only minor facility modifications are required with minimal capital spend needed to change the process chemistry 2. On
Slide 19: Uranium Sales & Marketing
Uranium Sales & Marketing PENINSULA ENERGY LIMITED 19
Slide 20: Substantial Long Term Sales Contracts
Substantial Long Term Sales Contracts • Long term sales contracts underpin Peninsula’s business • CY2018 forecast deliveries of 225,000 lbs of U3O8 5-Year Sales Profile (*) U3O8 (Klbs) 500 450 400 350 300 250 200 150 100 50 0 2018 2019 2020 2021 2022 (*) Committed deliveries only and excludes option
Slide 21: Flexible Sales Strategy
Flexible Sales Strategy • Maximizing returns by blending production with spot purchases • 2017 deliveries were filled by Lance production and purchases • Remaining deliveries for 2018 through 2020 have flexible origin clauses allowing seller optionality 2017 Sales Composition 2018-2020 Planned Sales
Slide 22: Unlocking the Value of the Contracts
Unlocking the Value of the Contracts • US$19 million (net) generated through contract transaction • Advanced cash receipts from future dates to present • Reduced delivery obligations during Lance transition process • Significant contract portfolio carries through year 2030 • Up to 6.5 million pounds
Slide 23: Conclusion
Conclusion PENINSULA ENERGY LIMITED 23
Slide 24: Peninsula Energy Take-Away Points
Peninsula Energy Take-Away Points U.S. Domestic Producer • Peninsula brought Lance, WY project into production in Dec-15 • Lance has the largest defined US uranium resource currently in Long Life production Project • Low pH transformation is actively being advanced Valuable • Up to 6.5M lbs sales co
Slide 25: Contact Details
Contact Details REGISTERED OFFICE Unit 32/33, Level 3, 22 Railway Road Subiaco, Western Australia 6008 Australia www.pel.net.au info@pel.net.au FURTHER INFORMATION Wayne Heili Managing Director +61 8 9380 9920 David Coyne Finance Director / CFO +61 8 9380 9920 PENINSULA ENERGY LIMITED 25
Slide 26: Appendix - Board and Management
Appendix 1 - Board and Management Board John Harrison, Non-Executive Chairman Capital Markets Wayne Heili, Managing Director & CEO Exec. Leadership & Technical David Coyne, Finance Director & CFO Finance & Risk Management Harrison (Hink) Barker, Non-Executive Director Nuclear Fuel Markets Mark Wheat
Slide 27: Appendix - Lance JORC Resource
Appendix 2 - Lance JORC Resource Tonnes Classification U3O8(kg) Grade (ppm U3O8) U3O8(lbs) (million) Measured 3.7 2.0 489 4.3 Indicated 10.0 5.1 466 12.7 Inferred 37 17.5 463 36.5 Total 50.7 24.6 473 53.5 ²JORC Table 1 included in an announcement to the ASX released on 27th March 2014:”Company Prese
Slide 28: Appendix - Lance Exploration Target Additional Disclosure
Appendix 3 - 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 29: Appendix - Lance Exploration Target Additional Disclosure
Appendix 3 - 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
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