Peninsula Energy Limited · ASX:PEN
Peninsula Energy — Investor Presentation (January 2015)
33 slides from Peninsula Energy's investor presentation, Jan 6, 2015
Slide 1: Companies Announcement Office cover letter
6 January 2015 Companies Announcement Office Via Electronic Lodgement COMPANY PRESENTATION Please find attached a copy of the presentation made by Peninsula Energy Limited's Executive Chairman, Mr John (Gus) Simpson at a shareholder information session held today in Perth, and scheduled for Melbourn
Slide 2: Fully Funded, Construction Underway, Production 2015
FULLY FUNDED CONSTRUCTION UNDERWAY PRODUCTION 2015 January 2015 Presentation
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: Additional Disclosure under ASX Listing Rules and JORC Code (2012)
Additional Disclosure under ASX Listing Rules and JORC Code (2012) ¹JORC Table 1 included in an announcement to the ASX released on 27th March 2014:”Company Presentation – Mines and Money Hong Kong”. Peninsula confirms that it is not aware of any new information or data that materially affects the i
Slide 5: Enhanced Project Funding
Enhanced Project Funding Original Senior Secured Debt Option Current Three Stage Mixed Financing Solution $173 million $173 million Debt : Equity ratio 60:40 Stage 1 $60m Equity $69m Equity (must be used first to build the project) Stage 2 $35m Debt $104m Debt Stage 3 $25m Debt & $53m surplus workin
Slide 6: Investment Highlights
Investment Highlights Major sector re-rating expected due to uranium supply contraction combined with increased new demand and utility contracting. Peninsula re-rating due to commencement of production 2015 • Project funding fully committed and secured • Peninsula will be the ASX’s next uranium prod
Slide 7: Drivers for Uranium Price Increase
Drivers for Uranium Price Increase • Demand – 434 operating reactors consuming 200,000,000 lbs U3O8 annually – 72 new reactors under construction and will be online 2015-2019 each requiring 700,000 lbs or 50,000,000 additional lbs U3O8 annually – 163 new reactors planned and 329 proposed – USA utili
Slide 8: US Uranium Forward Contracts
US Uranium Forward Contracts 18-24 month nuclear fuel cycle means that contracting for natural uranium increases in H2 2014 and 2015 Forward coverage gap commences in 2016 & becomes more pronounced from 2017 7
Slide 9: US Purchases of Enrichment by Source
US Purchases of Enrichment by Source • Significant dependency on Russian enrichment services • US enrichment capacity partly outsourced to Russia through HEU agreement and Russian Suspension Agreement for uranium 8
Slide 10: Corporate Overview
Corporate Overview Capital Structure 1 year share price & volume history Shares on issue 5,477m Share price 2.0c Market capitalisation $110m Cash $54m Undrawn debt $18m Debt $1m Shareholding % holding Resource Capital Fund VI 20.9% Pala Investments 12.3% BlackRock Funds 9.3% J P Morgan 6.7% AREVA 3.
Slide 11: Pro Forma Project Cash Flow
Pro Forma Project Cash Flow (All amounts are in NOMINAL terms) 2015 2016 2017 2018 2019 2020 2021 2022 Production ('000 lbs) 100 650 800 1,250 1,750 2,350 2,350 2,350 Average Price per Pound Sold (USD/lb) * 53 56 60 64 67 67 70 Revenue (USD'm) 0.0 35.3 46.4 70.7 110.3 172.9 165.3 163.4 All-in Operat
Slide 12: Pro Forma Balance Sheet – Post Entitlement Offer
Pro Forma Balance Sheet – Post Entitlement Offer Assets A$'m Cash 54.1 • Fully funded to positive cash flow Other Current Assets 3.3 Non-Current Assets 112.6 Total Assets 170.0 Liabilities Current Debt 0.7 • Effectively debt-free Other Current Liabilities 0.9 Non-Current Debt 0.3 • Stage 1 cash flow
Slide 13: Company Overview
Company Overview Emerging uranium producer with established project pipeline • Flagship Lance Projects in Wyoming – Fully Funded, Fully Permitted and construction commenced • Karoo Projects in South Africa – positive scoping study recently completed; PFS underway Lance: Wyoming USA • Low risk staged
Slide 14: Management
Management 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 Alfred Gillman Experience
Slide 15: Uranium Mining in Wyoming
Uranium Mining in Wyoming Wyoming very supportive of uranium extraction – multiple ISR operations in region 14
Slide 16: Lance CPP and Ross Project – Fully Permitted
Lance CPP and Ross Project – Fully Permitted All licenses and permits to operate Lance CPP and to mine the Ross Permit Area are granted • WDEQ Permit to Mine − Technical reports completed − Environmental reports completed − Licence application deemed complete − Environmental and technical review com
Slide 17: Rapid Resource Growth at Lance
Rapid Resource Growth at Lance 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 40,000,000 805 36,513,114 4,738 36,
Slide 18: Scalable Plant Development
Scalable Plant Development • Scalable development plan for Lance Projects based on Equity funding for revised Stage 1 production rate 600,000 to 800,000 lbs U3O8 p.a. over 2015 - 2017 • Stage 2 development plan based on debt funding and construction in H1 2017 with additional production of 500,000 l
Slide 19: Scalable Plant Conceptual Layout
Scalable Plant Conceptual Layout Green = Stage 1 development Blue = Stage 2 & 3 development Red = Optional future equipment to increase CPP capacity to 3.0mlbs pa 18
Slide 20: Scalable Production Ramp–up: Stage 1
Scalable Production Ramp–up: Stage 1 • Engineering design and re-specification completed by TREC in cooperation with the PEN production team • Behre Dolbear has completed an independent review of all changes and signed off on timing for Equity Funding Partners • Stage 1 production rate of 600 - 800,
Slide 21: Committed Funding for Stage 1
Committed Funding for Stage 1 • $69.4 million underwritten institutional funding solution fully committed • $16.8 million placement to RCF Capital Fund VI (RCF VI) completed – RCF VI joined PEN register with initial 19.6% interest • $52.6 million Entitlement Offer to all existing shareholders underw
Slide 22: Use of Funds
Use of Funds • Funds applied to 1. Repayment of BlackRock debt in full 2. Completion of stage 1 CPP construction 3. Deep disposal well 4. Wellfield development 5. Working Capital • Peninsula is fully funded to positive cashflow in year 2 • No equity required for stage 2 & 3 expansions – Funded by de
Slide 23: Production Ramp–up Stage 2 & 3
Production Ramp – up Stage 2 & 3 • Stage 2 production rate of 1,000,000–1,200,000 lbs U3O8 p.a. for period 2018–2020 – Capital expenditure $35,000,000 (majority debt financed) – Elution circuit added – Drying and packaging circuit added – 7 additional header houses added – 1,700,000 to be contracted
Slide 24: Lance – Financial Returns
Lance – Financial Returns Strong economics: IRR of 36% and average cash cost US$29.16/lb Key financial metrics Unlevered NPV 8% US$288m Cashflow positive Year 2 IRR 36% Stage 1 CAPEX 1 US$33m 1st Quartile All-in Costs @ 2.3mlbs p.a. *US$/lb Royalties and indirect taxes $6.28 Operating costs $11.48 R
Slide 25: Lance – Exploration Target
Lance – Exploration Target 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 target3 158-217mlbs U3O8 24
Slide 26: Construction Activities
Construction Activities • Review contractor bids • Install underground plumbing and electrical • Pour foundation and slab for CPP and Administration buildings • Erect Pre Engineered Buildings for CPP and Administration • Set tankage and pipe plant • Waste water pond • Deep Disposal Well • Domestic w
Slide 27: Construction Activities – Completed Earthworks
Construction Activities – Completed Earthworks 26
Slide 28: CPP Construction Activities
CPP Construction Activities 27
Slide 29: CPP Ion Exchange Columns
CPP lon Exchange Columns PENINSULA ENERGY inn 28
Slide 30: Well Field Installation
Well Field Installation 29
Slide 31: Well Field Installation
Well Field Installation • Mobilize drilling contractors • Finalize Mine Unit 1 monitor well installation • Abandon historic exploration holes within Mine Unit 1 • Perform aquifer pump tests • Collect baseline ground water quality samples • Regulatory review of Mine Unit 1 Well Field Package • Comple
Slide 32: Investment Highlights
Investment Highlights Major sector re-rating expected due uranium supply contraction combined with increased new demand and utility contracting. Peninsula re-rating due to commencement of production 2015 • Project funding fully committed and secured • Peninsula will be the ASX’s next uranium produce
Slide 33: ASX's Next Uranium Producer
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 — Investor Presentation (January 2015) on 6ix