Peninsula Energy Limited · ASX:PEN
Peninsula Energy — Investor Presentation (August 2014)
24 slides from Peninsula Energy's investor presentation, August 2014
Slide 1: Fully Permitted, Construction Underway
FULLY PERMITTED CONSTRUCTION UNDERWAY AUGUST 2014 Presentation
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 Overview & Highlights
Peninsula Overview & Highlights • Peninsula will be the ASX’s next uranium producer with production from its Lance Projects in Wyoming • Peninsula has a low risk, clear path to production • Significant operating margins achievable even at the current uranium price • Strong financial support from fir
Slide 4: Corporate Overview
Corporate Overview Capital Structure 1 year share price & volume history Shares on issue 3,428m Share price 2.5c Market capitalisation $86m Cash & undrawn debt $21m Drawn Debt US$12m Enterprise value $88m Shareholding % holding Pala Investments 12.41% BlackRock Funds 9.00% AREVA 6.65% J P Morgan 4.6
Slide 5: 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 management; 25 years Executive Chairman experience in USA, Asia, Africa and Australia Alfred Gillman Experience
Slide 6: Management
Management Uranium marketing & utility experience Management – South Africa Glenn Black Senior management engineer; 30 years experience with De Beers in mine construction and operations in Africa COO, CEO South Africa George van der Walt 9 years exploration background with extensive uranium experien
Slide 7: Business Plan
Business Plan Production target of 8-10mlbs U3O8 – BEFORE 2022 • Mirror and meet the requirements of the power utilities - Utilities want diversity and security of supply – Diversity & security = multiple suppliers with multiple uranium sources located in multiple stable and secure countries – Penin
Slide 8: Uranium Mining in Wyoming
Uranium Mining in Wyoming Wyoming very supportive of uranium extraction – multiple ISR operations in region 8
Slide 9: Lance Project Overview
Lance Project Overview • JORC Code compliant resource of 54mlbs U3O8: (51.2Mt at 476ppm U3O8) • Proven ISR technology: – ISR produced 45% of the world’s uranium in 2013 – 5 ISR plants already operating in Wyoming & 1 more under construction • Constructing a 2.3mlbs per annum ISR operation in 2 stage
Slide 10: 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 4,738 36,513,114 36,
Slide 11: Two Stage Production Ramp-up
Two Stage Production Ramp-up Ability to increase 2.5 production on future price • Low-risk path to production Annualised Production Rate (mlbs) increases Stage 2 • Lance cashflow positive from 2.0 Start Q4 2015 2018 or 1.5 2022 • Option to accelerate expansion 1.0 Stage 1 start Q4 • Expansion timed
Slide 12: Lance – Strong Financial Returns
Lance – Strong Financial Returns Strong economics: pre-tax IRR of 34% and average cash cost US$30.65/lb Key financial metrics Pre-tax NPV 8% US$328m Payback 3.4 years Cashflow positive Year 2 Pre-Tax IRR 34% Initial CAPEX 1 US$68m Financial Metrics – 2.3mlbs p.a. *US$ per annum *US$/lb Gross revenue
Slide 13: Lance Capex Requirements
Lance Capex Requirements Low capital intensity and staged capex requirements Process Plant & Wellfield CAPEX to design production rate by US$ Production Unit Ross Production Unit (2014 / 15) To be funded by equity & $68m project finance debt (1,150klbs p.a.) facility Kendrick Production Unit (2017 /
Slide 14: Lance Project Funding
Lance Project Funding Notes • US$22m in senior secured notes from BlackRock for pre-licence construction • US$12.4m drawn; further US$9.6m available for drawdown • Notes have a coupon of 11% Debt • Approx. $50-60m in senior debt planned • Negotiations on project financing are underway: – Behre Dolbe
Slide 15: Lance – Strong Exploration Potential
Lance – Strong Exploration Potential 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 potential 158-217mlbs U3O8 15
Slide 16: Karoo Projects Overview
Karoo Projects Overview High grade U3O8 & Molybdenum in proven area • Located in the Karoo region of RSA, approx. 400km to 600km E-NE of Cape Town • Known uranium and molybdenum mineralised province • 7,800 km2 over Permian sandstones • 32,176 hectares of freehold land • Freehold land covers majorit
Slide 17: Karoo Scoping Study - Positive results
Karoo Scoping Study - Positive results Recent positive Karoo scoping study; Feasibility study commenced in Q4 2013 • Scoping Study completed on Karoo Eastern Sector Projects in South Africa – Combined open cast and decline mining – Decision to proceed to Pre-Feasibility Study – Significant resource
Slide 18: Uranium Production vs Consumption
Uranium Production vs Consumption Uranium consumption has exceeded production for many years but recycled supplies have left the market in oversupply – sources of recycled materials are now almost exhausted Key sources of recycled materials nearly exhausted: • Down blended weapons grade material - R
Slide 19: Nuclear Power – the best solution
Nuclear Power – the best solution Location of USA & Europe nuclear plants • Nuclear power provides the best solution for a non- polluting 24:7 base load power source. • Over 430 existing nuclear plants, focused in Europe, North America, Russia, South Korea and Japan. • 73 new NPP in construction 201
Slide 20: Global Reactor Growth & Uranium Demand
Global reactor Growth & Uranium Demand Electricity Generation and Uranium Consumption • Global Nuclear Generation Capacity will increase 70% over the next decade - from 374,611Mwe to 640,904Mwe • 73 Reactors under construction & 172 new Reactors planned • Annual Uranium Demand will increase from 177
Slide 21: Chinese Nuclear Generation 2012-2020
Chinese Nuclear Generation 2012-2020 Between 2010 and 2013, China purchased ~$15B of U3O8 ~308 million pounds U3O8 (50 times 2012 consumption levels) China’s demand for U3O8 is forecast to increase over 19 times by 2020 Source: World Nuclear Association; China Guongdong Nuclear Power Corporation; Ch
Slide 22: Peer Company Valuation Fundamentals
Peer Company Valuation Fundamentals • Peninsula trading at 60-90% discount (EV / lb basis) to North American listed peers • Size of Peninsula resource base not reflected in valuation metrics • Ur-Energy commenced production in August 2013; 31% increase over past 16 months • Uranerz commenced product
Slide 23: Investment Highlights
Investment Highlights Major sector and company re-rating expected from uranium supply deficit combined with Peninsula commencing production • Peninsula will be the ASX’s next uranium producer • The Company has a low risk, clear path to production from the Lance Projects • Significant operating margi
Slide 24: ASX's Next Uranium Producer
Head Office Unit 17, Level 2 100 Railway Road ASX’s NEXT Subiaco WA 6008 Telephone: +61 8 9380 9920 URANIUM Facsimile: +61 8 9381 5064 PRODUCER Website www.pel.net.au Email contact info@pel.net.au
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