The Lance Royalty was created pursuant to a mineral lease and transfer agreement between Strathmore Resources (US) Ltd., Strata Energy Inc. and Peninsula Minerals Limited dated August 24, 2009, and the Lance Royalty was assigned to Uranco Inc., a wholly owned subsidiary of Westwater Resources Inc. pursuant to an assignment of overriding royalty interest dated July 31, 2015, between Uranco Inc. and Strathmore Resources (US) Ltd.

The Lance Royalty does not apply to the entire Lance Project area. The royalty currently applies to approximately 5586 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 Energy Ltd. ("Peninsula") in its June 2019 quarterly report is 42,494 acres. The area subject to the Lance Royalty represents 13% of such aggregate acreage. 

According to publicly available information, the Lance Project is an ISR uranium project located on the north-east flank of the Powder River Basin in Wyoming, USA and is comprised of approximately 42,494 acres of mixed surface and mineral right holdings including private access agreements as well as state and federal mining claims. 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. The project is 100% owned by Strata Energy Inc., a wholly owned subsidiary of Peninsula.  

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

Mineralization in the area of the Lance Project was initially discovered in the 1970’s. From October 1977 to April 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 Minerals Limited 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 2009 confirmed that the project was amenable to ISR extraction.

Between 2009 and 2015, Peninsula completed additional work to progress the project towards production, including completion of permitting and relevant studies. Production commenced at the Lance Project in December 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 per pound.

In its September 30, 2019 quarterly activities report, Peninsula disclosed that 731 pounds of U308 were recovered and 31,035 pounds of U308 were dried and drummed in the quarter.

On September 17, 2018, Peninsula announced that it had completed a JORC(1) 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 per pound 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 per pound of U3O8 produced with a break-even price of US$34 per pound 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 per pound of U3O8. Peninsula disclosed that the study included life of mine production of 33.4 mmlb 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 has 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 November 14, 2018, Peninsula disclosed an updated JORC(1) compliant resource estimate for the Lance Project, which includes the totality of the project and is not limited to the area covered by the Lance Royalty. This resource was later revised in Peninsula’s September 30, 2019 quarterly activities report. The mineral resource esimtate included a measured and indicated resource of 15.80 mmlb U3O8 (14.50 million tonnes at an average grade of 0.049% U3O8) and an inferred resource of 37.80 mmlb U3O8 (36.20 million tonnes at an average grade of 0.048% U3O8).

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 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 has been reduced to lower costs.

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. 

On November 4, 2019, Peninsula announce that they had received approval of the project’s Interim Operations Report by the Wyoming Department of Environmental Quality (the “WDEQ”), and now had full regulatory authorisation for low pH ISR operations in Mine Units 1 & 2, the already-mined areas of the Lance Projects, subject only to meeting two pre-operational license conditions (revisions to the radiation protection program and updates to surety bond).

As described in Peninsula’s announcement of 21st March 2019, implementation of low pH ISR at the Lance Projects is to be completed in four phases. The Phase 1 field demonstration of mining operations and the initial restoration stage is now complete. Phase 2, the commercial scale low pH ISR operations in Mine Units 1 and 2 can now occur along with the Phase 3 groundwater restoration field demonstration activities. The Phase 3 demonstration will conclude upon approval by the WDEQ of an Interim Restoration Report. Peninsula announced on December 31, 2019 that the Interim Restoration Report had been filed with the WDEQ. WDEQ review and approval of the IRR is the final step in the process of gaining authorisation to utilise low pH in-situ recovery (ISR) techniques throughout the Lance project license area.

Note 1:
The 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.