• Project Summary
  • Royalty Description
  • Recent Updates
  • Project History

According to publicly available information, the Lance Project is a producing ISR uranium project located on the north-east flank of the Powder River Basin in Wyoming, USA and is comprised of approximately 38,416 acres of mixed surface and mineral right holdings including private access agreements as well as state and federal mining claims. The project is 100% owned by Strata Energy Inc., a wholly owned subsidiary of Peninsula Energy Ltd (“Peninsula”). 

Unless otherwise indicated, the scientific and technical information herein regarding the Lance Project has been derived from the public disclosures of Peninsula.

Ross and Kendrick Mineral Resources – As of December 31, 2021 (100% Basis)
Measured Indicated Inferred
Tonnes (Mt) Grade
(% U3O8)
Content (MLbs. U3O8) Tonnes (Mt) Grade
(% U3O8)
Content
(MLbs. U3O8)
Tonnes (Mt) Grade
(% U3O8)
Content
(MLbs. U3O8)
2.59 0.053 3.00 8.15 0.055 9.72 8.25 0.05 9.09
Estimated Resources at Barber Resource Area (Not Evaluated in the DFS) (100% Basis)
Measured Indicated Inferred
Tonnes (Mt) Grade
(% U3O8)
Content
(MLbs. U3O8)
Tonnes (Mt) Grade
(% U3O8)
Content
(MLbs. U3O8)
Tonnes (Mt) Grade
(% U3O8)
Content
(MLbs. U3O8)
0.67 0.048 0.71 2.55 0.043 2.42 21.15 0.048 28.73
Notes On Mineral Resources:
  • The mineral resources were estimated in accordance to JORC (2012).
  • The resource was calculated using a GT product contour of 0.2 m% and a cutoff of 200 ppm U3O8.
  • From the JORC-compliant Lance Uranium Project Technical Report and Mineral Resource Estimate prepared by WWC, July 2022. JORC Table 1 included in a Peninsula Energy Limited announcement to the Australian Stock Exchange released on 14 November 2018:” Revised Lance Projects Resource Tables”.
  • Mineral resources do not have demonstrated economic viability
  • Totals may not add due to rounding

The Company holds two royalties on portions of the Lance Project, being the 4% Lance Royalty and the 1% Lance Royalty (each as defined below).

The 4% Lance Royalty

The Company acquired a royalty equal to 4.0% of the gross income from certain portions of the Lance Project (the "4% Lance Royalty") on March 5, 2019. The 4% Lance Royalty is equal to 4.0% of the gross income from the underlying property without any deduction, provided that such royalty cannot exceed 7% of the gross income from the underlying property when combined with royalties paid to the State of Wyoming. The 4% Lance Royalty does not apply to the entire Lance Project area. The Company believes that this royalty currently applies to approximately 5,586 acres of an estimated 67,500 permit acres or 8% of the currently proposed permitted area. The aggregate surface and minerals rights disclosed by Peninsula in its quarterly report for the period ended December 31, 2020, is 38,060 acres. The Company believes that the area subject to the 4% Lance Royalty represents approximately 15% of such aggregate acreage.

The 1% Lance Royalty

On April 1, 2022, the Company announced that it had acquired an additional 1% gross revenue royalty interest that covers the entirety of the current permitted Ross production area, as well as the Kendrick and Barber expansion areas of the project (the "1% Lance Royalty"). The 1% Lance Royalty is applicable to all uranium and related minerals from the Lance Project area and the royalty is calculated based on gross sales proceeds, with no deductions for costs or expenses.

The following information regarding project milestones and recent developments for the Lance Project has been summarized from Peninsula's public disclosure.

On August 15, 2022, Peninsula announced the details of a definitive feasibility study ("DFS") completed under JORC for the Ross and Kendrick Projects at Lance. The key results from the DFS included a LOM production of 14.4 Mlbs U3O8 over 14 years of mine life, steady state production of 2.0 Mlbs/year from year 4 of the study, and All-In Sustaining Costs of US$39.08/lb.

Included in the DFS is an updated resource summary including just the Ross and Kendrick Projects. The estimate is broken into two areas, the first covers the Ross and Kendrick permit areas used in the DFS, which includes measured and indicated resource of 12.72 Mlbs of U3O8 (10.74 million tonnes at an average grade of 0.05% U3O8) and an inferred resource of 9.09 Mlbs of U3O8 (8.25 million tonnes at an average grade of 0.05% U3O8). The second area is estimated on the Barber resource area, which is not included in the DFS, which includes 3.13 Mlbs of U3O8 (3.22 million tonnes at an average grade of 0.05% U3O8) and an inferred resource of 28.73 Mlbs of U3O8 (21.15 million tonnes at an average grade of 0.05% U3O8).

Peninsula indicates the updated resources are from the JORC-compliant Lance Uranium Project Technical Report and Mineral Resource Estimate, July 2022 and JORC Table 1 included in a Peninsula Energy Limited announcement to the Australian Stock Exchange released on 14 November 2018: "Revised Lance Projects Resource Tables". Peninsula states that it is not aware of any new information or data that materially affects the information included in this announcement and that all material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed. Peninsula further states that the form and context in which the competent person's findings are presented have not been materially modified from the original market announcement.

On November 24, 2022, Peninsula announced that a positive financial investment decision to restart uranium production at the Lance Operation had been completed. In Peninsula's quarterly activity report for March of 2023, it stated that commencement of commercial production was expected in mid-year 2023, following modest delays in certain long lead item deliveries.

In a news release on July 19, 2023, Peninsula announced it would delay the re-start of production at Lance whilst it accelerated development of in-house resin processing and yellowcake production capability. This late shift in strategy was necessitated by the termination of the resin processing agreement between Peninsula and Uranium Energy Corporation. In a news release dated August 31, 2023, Peninsula announced updated plans to initiate production at Lance. Construction activities for an expanded plant will commence in late 2023, and wellfield development and construction activities will continue in advance of a planned production restart in late 2024. The new In-Situ Recovery plant is anticipated to produce up to 2.0 Mlbs per year of U3O8 yellowcake.

Mineralization in the area of the Lance Project was initially discovered in the 1970s. From October of 1977 to April of 1978, an ISR pilot plant was constructed and operated, but was shut down and remediated after the incident at Three Mile Island. According to publicly available information, Peninsula acquired the precursor Sundance project from PacMag Metals Limited in February of 2007. The project lands were expanded through land acquisitions in 2008 and 2009. Metallurgical testing announced in August of 2009 confirmed that the project was amenable to ISR extraction.

Between 2009 and 2015, Peninsula completed additional work to progress the project toward production, including completion of permitting and relevant studies. Production commenced at the Lance Project in December of 2015, utilizing an alkaline leach method. Peninsula has disclosed that such method presented challenges and has been exploring utilizing a mild acid (low pH) production method.

In its annual report for the year ended June 30, 2017, Peninsula disclosed that the Lance Project operated for its first full year and produced 145,000 pounds of U3O8. In its annual report for the year ended June 30, 2018, Peninsula disclosed that the Lance Project produced approximately 155,035 pounds of U3O8, and it sold 177,934 pounds of U3O8 from the Lance Project in the fiscal year ended June 30, 2018, at a cash sale price of US$46.73/lb. In its September 30, 2019, quarterly activities report, Peninsula disclosed that 731 pounds of U3O8 were recovered and 31,035 pounds of U3O8 were dried and drummed in the quarter.

On September 17, 2018, Peninsula announced that it had completed a JORC compliant feasibility study, which considered a low pH mining option for the project. It disclosed direct operating expenditures over the life of mine of US$15.59/lb. of U3O8 produced, capital expenditures to complete low pH transition of US$5.3 million, stage 2 and 3 expansion capital expenditures of US$113.4 million, life of mine all-in sustaining cost average of US$31.77/lb. of U3O8 produced with a break-even price of US$34.00/lb. of U3O8, a net present value of US$156.5 million and internal rate of return of 30%, based on a long-term average sales price assumption of US$49.00/lb. of U3O8. Peninsula disclosed that the study included life of mine production of 33.4 Mlbs of U3O8 over a 17-year mine life. On September 17, 2018, Peninsula announced that it was seeking permitting amendments to allow for low pH mining at the project. In order to preserve resources for future low pH extraction and to reduce cash expenditures, Peninsula announced that it suspended the majority of alkaline-based production activity within one of the mining units at the Lance Project. On November 28, 2018, Peninsula announced that it received approval to advance to the review process to change to a low pH solution in the mine operations. On December 28, 2018, Peninsula further announced that it had initiated field demonstration activities related to such low pH recovery at the Lance Project.

On January 14, 2019, in its quarterly report for the three months ended December 31, 2018, Peninsula announced that production from the Lance Project during the quarter was 20,364 pounds of U3O8. Production was affected by a previously announced nine-day processing plant shut down for repairs and a natural decline of head grades in remaining alkaline leach areas where chemical addition had been reduced to lower costs.

In its annual report for the year ended June 30, 2019, Peninsula disclosed that 8,491 pounds of U3O8 were produced in the quarter ended June 30, 2019. In July 2019, Peninsula announced that it had determined to idle alkaline-based production activities and focus on completion of the low pH field demonstration. In its annual report for the year ended June 30, 2020, Peninsula disclosed that a total of 5,708 pounds of U3O8 were captured in its 2020 fiscal year. It further disclosed that U3O8 captured in the December 2019 quarter was higher than other quarters during the year following the completion of reconciliations for uranium drying campaigns completed during the 2019 calendar year. This resulted in a positive reconciliation, which was recognized in the December 2019 quarter. Production in subsequent quarters was negligible.

On February 26, 2021, Peninsula announced an update on its low pH field demonstration activities at the project. It disclosed that it started operating a field demonstration in August 2020 after its trial activities in 2019, with the primary objective being to operate in an unmined area of the orebody at the project to confirm the optimal operating conditions for the project. It also disclosed that three full-scale in-situ recovery test patterns were operating in a previously unmined area of Mine Unit 1, all three of which were stated as operating at planned flow rates of 75 gallons per minute and with one pattern having successfully reached the designed pH of 2.0, but the other two patterns taking longer than expected to reach the target pH level, having reached a pH of 4.0. Peninsula stated that the units have not shown significant issues with fine solids generation in the production stream. Peninsula further disclosed that it would continue to run the field demonstration for the foreseeable future, with an expected period of 18-24 months. This period represented a six-month delay from Peninsula's initial expectations.

Peninsula further announced on May 17, 2021, that the company continued refinements to the low-Ph field demonstration testing and were now seeing the results of changes instituted in April including adjustments to the well pattern and oxygenation. As grades increased, Peninsula announced activation of the pilot ion exchange circuit in early March, though uranium grades were not sufficiently high yet to allow significant uranium recovery.

On February 17, 2022, Peninsula announced a budget of US$3.4 million had been allocated for the low-pH ISR transition program, including operational readiness activities on the Ross portion of the project at Mine Units 1 and 2, commencement of drilling activities at Mine Unit 3, and front-end engineering and design for low pH ISR process modifications. On March 28, 2022, Peninsula announced that it was commencing an update to its 2018 Low-Ph ISR Feasibility Study, incorporating results and conclusions from Peninsula's technical de-risking activities, including the recently completed MU1A Field Demonstration.

On May 4, 2022, Peninsula announced that it had received approval for the license amendment application to the Wyoming Department of Environmental Quality to authorize use of several different oxides in conjunction with the low pH lixiviants used in the uranium extraction process.