Peninsula Energy Limited · ASX:PEN
Peninsula Energy — Investor Presentation (June 2017)
38 slides from Peninsula Energy's investor presentation, Jun 16, 2017
Slide 1: Company Presentation ASX Cover Letter
16 June 2017 Companies Announcement Office Via Electronic Lodgement COMPANY PRESENTATION Please find attached a copy of the presentation being made by Peninsula Energy Limited's Managing Director/CEO Mr Wayne Heili at a shareholder information session to be held today in Perth as well as at sharehol
Slide 2: Uranium producer positioned for growth
Uranium producer positioned for growth Shareholder Information Sessions│ Australia│ 16-21 June 2017 PENINSULA ENERGY LIMITED ASX:PEN
Slide 3: 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 4: Summary
Summary Globally significant resource base totalling 110.6¹ million pounds U3O8 Producing uranium at the flagship Lance Project in Wyoming, USA Strong U3O8 sales contract book ensures revenues over the next decade – weighted average price $54/lb Well funded with supportive major shareholders
Slide 5: Board of Directors
Board of Directors • The Board completed a planned transition at the end of March, 2017 • Mr Wayne Heili replaced Mr John (Gus) Simpson as MD & CEO • Mr Warwick Grigor and Mr Richard Lockwood retired • Mr David Coyne joined the Board as Finance Director • The new Peninsula Board of Directors John Ha
Slide 6: Corporate Overview
Corporate Overview Capital Structure Share Price & Volume History Shares on issue 229m Price Volume (m) (A$/share) Share price (9-June-17) $0.300 0.90 2.0 Market capitalisation A$69m 0.80 Enterprise Value A$81m 0.70 1.5 Cash and Security Deposits (31-Mar-17) US$17m 0.60 0.50 1.0 Shareholding* Holdin
Slide 7: Peer Comparison
Peer Comparison klbs U3O8 m lbs 10,000 Contracted Volume Resource Base 120 $54/lb 8,000 100 6,000 80 60 4,000 $50/lb 40 2,000 $41/lb 20 - 0 US$m US$ per lb Market Capitalisation Market Cap / Resource Base 300 3.0 250 2.5 200 2.0 150 1.5 100 1.0 50 0.5 - - Note: Market capitalisations are as at 9 Jun
Slide 8: Uranium Market Themes
Uranium Market Themes • Production Restraint is becoming a common theme • The big miners have cut back production by 10-15% in CY17 • Kazatomprom, Cameco, AREVA, Paladin, more • Demand for carbon-free nuclear power continues to grow • Utilities have >800 m lbs U3O8 of uncovered demand over next 10 y
Slide 9: Kazatomprom is Changing its Strategy
Kazatomprom is Changing its Strategy Kazatomprom is shifting its behaviour to become a price maker rather than a price taker, and here’s how they’re doing it: 1. Trading House Kazakatom (THK) The key objectives of 2. Supply cuts: 10% in 2017 Kazatomprom’s strategy include “trebling the company's val
Slide 10: Uranium Supply Will Not Meet Demand
Uranium Supply Will Not Meet Demand • No matter whose data you look at, it is clear that uranium supply is not projected to keep up with demand over the next decade World Uranium Supply and Demand Forecasts U3O8 m lbs 300 250 Today 200 150 100 50 0 2012A 2013A 2014A 2015A 2016E 2017E 2018E 2019E 202
Slide 11: Demand Trends
Demand Trends • Utilities have been avoiding the term market and drawing down inventories since 2012 Term and Spot Market Contract Volumes U3O8 m lbs 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 2016 Term Contracts (LHS)
Slide 12: The Uranium Price & Equities Recovery
The Uranium Price & Equities Recovery • The uranium price recovery will be driven by: 1. Change in behaviour of the major producers 2. Change in behaviour of buyers 3. Market shift in favour of suppliers as inventories fall • Uranium equities will rise dramatically on commodity price recovery Source
Slide 13: The Strategy
The Strategy • Develop long-life, low-cost assets underpinned by strong sales contracts • Optimise the production scale of the Lance Project • Advance Karoo Projects as secondary uranium source • Grow the project pipeline • Expand relationships with US and International utilities PENINSULA ENERGY LI
Slide 14: Poised for Higher Prices
Poised for Higher Prices Annual Production Rate (klbs U3O8) 2,500 Longer term 2,000 expansion Current Operating Rate 1,500 Existing Capacity 1,000 When the market improves 500 Today - Stage 1 Stage 2 Stage 3 - AISC: US$ 40/lb - AISC: US$ 30/lb - AISC: US$ 29/lb - Producing to meet contracts - Expans
Slide 15: Lance ISR Project │ Wyoming, USA
Lance ISR Project │ Wyoming, USA PENINSULA ENERGY LIMITED 14
Slide 16: Premier Uranium Jurisdiction
Premier Uranium Jurisdiction • Wyoming is a premier uranium extraction jurisdiction, hosting multiple ISR operations PENINSULA ENERGY LIMITED 15
Slide 17: Significant Resource Potential
Significant Resource Potential • 53.7m lbs JORC (2012) compliant resource base (51.2Mt at 476ppm U3O8) offers long mine life with existing infrastructure Exploration Target: 158-217m lbs (169-196mt at 426-530ppm U3O8) Existing JORC Resource: 53.7mlbs Please note that in accordance with Clause 17 of
Slide 18: Production Results
Production Results • June Quarter Improved Operational Performance • Production rate increased to >400 pounds per day – 40% above average rate in March 2017 quarter • Flow rates stabilized Pounds U3O8 Quarterly Production 60,000 50,000 53,590 40,000 30,000 30,000 28,856 35,000 20,000 25,293 10,000 9
Slide 19: Cost Control and Production Improvement
Cost Control and Production Improvement • Tightly Controlled Development Activities and Costs • House #8 is in re-circulation and due online late in Q217 • House #9 is under construction • Technical Team Focussed on Optimising Operating Parameters • Filtration incorporated in houses 5 & 6 proven eff
Slide 20: Karoo Projects │ South Africa
Karoo Projects │ South Africa PENINSULA ENERGY LIMITED 19
Slide 21: Karoo Projects, South Africa
Karoo Projects, South Africa • 56.9m lbs eU3O8 at 1,108ppm JORC (2012) compliant resource (23.3mt at 1,108ppm) • 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 • Ownership: Peninsula 74% and
Slide 22: Karoo Development Path
Karoo Development Path • Karoo Pre-Feasibility Study • DRA Global South Africa is completing work in support of PFS • Continuing to refine mining and processing methodologies • DRA’s Global investment partner Concentrate Capital Partners funding the DRA work • Significant resource potential • Karoo
Slide 23: Peninsula Uranium Limited│ London
Peninsula Uranium Limited│ London PENINSULA ENERGY LIMITED 22
Slide 24: Uranium Sales and Marketing Strategy
Uranium Sales and Marketing Strategy • Peninsula Uranium Limited (PUL) is a dedicated uranium sales and marketing subsidiary • Building on existing utility relationships • Purchasing spot market uranium to fill contracts where possible • Progressively commit production to term contracts: ↑ Revenue :
Slide 25: Substantial Utility Term Sales Contracts
Substantial Utility Term Sales Contracts • Utility term sales contracts underpin Peninsula’s business • Average sales price of US$54/lb 5-Year Sales Profile U3O8 (k lbs) 700 600 500 400 300 200 100 0 2017 2018 2019 2020 2021 PENINSULA ENERGY LIMITED 24
Slide 26: Uranium Sales
Uranium Sales • CY2017 Y-T-D 250,000 pounds U3O8 sold at an average US$54/lb 150,000 lbs purchased Contracted to purchase a further 300,000 lbs p.a. over next 3 years at average cost of US$25/lb 100,000 lbs of Lance Production PENINSULA ENERGY LIMITED 25
Slide 27: Conclusion
Conclusion PENINSULA ENERGY LIMITED 26
Slide 28: Peninsula Energy Investment Highlights
Peninsula Energy Investment Highlights Very strong committed cash margins secured Sales and purchases at fixed prices Significant contract sales book that supports long-term revenue outlook Average sale price US$54/lb Forecasting cash positive Q2 CY2017 Maintaining a healthy cash positio
Slide 29: 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 PENINSULA ENERGY LIMITED 28
Slide 30: Appendix 1 - Lance Exploration Target Additional Disclosure
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 31: Appendix 1 - Lance Exploration Target Additional Disclosure
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 32: Appendix 2 - Karoo Exploration Target Additional Disclosure
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 33: Appendix 2 - Karoo Exploration Target Additional Disclosure
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 34: Appendix 3 - 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 35: Appendix 4 - 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 36: Appendix 5 - 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 37: Appendix 5 - Management
Appendix 5 - Management Extensive experience in mine development & uranium sales Wayne Heili Mr Heili has spent the majority of his 30-year professional career in the uranium mining industry, most recently Managing Director & CEO serving as President/CEO and Director of NYSE and TSX listed Ur-Energy
Slide 38: Appendix 6 - U3O8 In-Situ Recovery Process
Appendix 6 - U3O8 In-Situ Recovery Process ISR is a proven U3O8 recovery method MU1 HH1-4 MU2 HH5-7 MU1 HH1-4 MU2 HH5-10 MU3 HH11-17 Source: World Nuclear Association PENINSULA ENERGY LIMITED 37