Peninsula Energy delays Wyoming uranium project restart, shares plunge

The processing plant at the Ross permit area (Image: Peninsula Energy)

Peninsula Energy (ASX: PEN) has delayed the restart of commercial production at its Lance project in Wyoming, from the first quarter of this year until mid-2023.

According to the company, there has been a delay in the delivery of equipment.

“The current inflationary economic environment and very real supply-chain constraints, in combination with an unusually difficult Wyoming winter, have presented challenges but the team has demonstrated their professional capability and resolve,” Peninsula CEO Wayne Heili said in a news release.

“Despite encountering some delivery delays that are outside of our control, the team continues to complete the transition construction work on a short timeline and within the projected capital framework,” he said.

The company capital expenditure to date is in line with the 2022 definitive feasibility study, which estimated a life-of-mine capital cost of $290.6 million, with the Stage 1 operation requiring an up-front capital investment of $2.7 million and a wellfield replacement and sustaining capital expenditure of $16.3 million.

The Lance project holds a resource of 53.7 million pounds of uranium oxide (U3O8), making it one of the largest uranium projects in the US.

It is estimated that the Lance could produce two million pounds of uranium a year at steady-state production from the fourth year of production, producing 14.4 million pounds of U3O8 over an estimated 14-year mine life.

Shares plummeted 14.3% in early trading on Thursday. The company has a $99 million market capitalization.