Peninsula Energy Limited · ASX:PEN
Peninsula Energy — 20th Annual Global Investment Conference, H.C. Wainwright & Co. 2018
29 slides from Peninsula Energy's conference presentation, September 2018
Slide 1: Unlocking the Full Potential
UNLOCKING THE FULL POTENTIAL 20th Annual Global Investment Conference │ H.C. Wainwright & Co.│ September 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 Management • Experienced technical, financial and commercial team U.S. • Producing flagship asset, Lance Uranium Project - Wyoming, USA Production Focus • Lance is licensed to produce up to 3M lbs of U3O8 per year Innovation • ‘Game Changing’ low pH
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 0.45 7.0 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 • Lance contains res
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 bear market may have reached its turning 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 is opening up • Both markets are
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: Geopolitical Support for U.S. Production
Geopolitical Support for U.S. Production • Increasing geopolitical support for domestic production 1. Section 232 of the US Trade Expansion Act Petition • US Dept. of Commerce (DOC) commenced investigation on 18 July 2018 • Starts twelve month clock for government action • Remedies likely to bolster
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 center in premier jurisdiction Asset • The largest defined uranium resource of any currently producing project in the U.S. Redefining • Working to transform Lance performance and cost profile Success using low pH ISR process – watc
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 • Demonstrating consistency with 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 expe
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 release expected in September 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 within MU2 can be carried out with ongoing operations in MU1 PENINSULA ENERGY LIMITED 17
Slide 18: Low Cost Transformation
Low Cost Transformation 1. CAPEX and OPEX • Feasibility Study to outline Lance life-of-mine OPEX & NPV • Minimal CAPEX required • Changing process chemistry, not the underlying processes • Only minor facility modifications are required up front 2. Ongoing production operations and sales revenue • 10
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 • Significant contract portfolio carries through year 2030 • Up to 6.5 million pounds U3O8 remaining under contract through 2030 • 4.6 million pounds U3O8 committed deliveries through 2030 • Up to 1.9 million pounds U3O8 optional at customer election between 2021
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 is well positioned to benefit from current market trends Long Life • Lance has the largest defined US uranium resource currently in Project production Valuable • Up to 6.5M lbs sales contracted through 2030 Contract Book • Term con
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 1 - 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
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
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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