Gus Simpson, managing director of US-focused uranium miner Peninsula Energy Ltd (ASX:PEN), brings Proactive Investors up to date on the company’s progress in the USA, where the company recently started production.
The company is still in the ramp-up period, but the important thing is it has several header houses in production at its Woming in-situ leach operation and it is making deliveries to its customers – utility companies – in the US.
“We are currently producing at around 300,000 pounds per annum,” Simpson said, adding that the company expects to ratchet this up to around half a million pounds by the end of the first quarter of 2017.
Simpson concedes that the uranium price is not as healthy as he would like, but nonetheless the company should be cash flow positive by the second quarter of next year.
Simpson observed the company is protected to some extent from the effects of the soft uranium price by long-standing contracts it has in place.
“We’ve got about 8mln pounds under contract at a good average price,” Simpson said, and assuming the company keeps a close rein on costs, it will continue to enjoy a decent margin on the uranium it sells.
Simpson thinks the uranium price will recover once Kazakh producers’ urgent need for ready cash recedes.
Meanwhile, in South Africa, the company is making progress on its Karoo uranium projects, where it has “some 57 million pounds of material”.
The company is working on the pre-feasibility study (PFS) and, all being well, this should be ready for publication in the first quarter of next year as well, so the early months of 2017 are looking action-packed for the company.
“Depending on the results of that [PFS], we’ll be looking to go on to the definitive feasibility study there, and also the reserves drilling,” Simpson revealed.
Intriguingly, Simpson said talks are at an advanced stage with a third party that is looking to come in and fund the next stage of work in return for a share of the ownership.
“While it will reduce the actual percentage of what we own in South Africa, it will advance the project significantly and, obviously, bring us greater benefit down the track,” Simpson said.
Story by ProactiveInvestors