Peninsula Energy Ltd (ASX:PEN, OTCQB:PENMF) has secured a contract to supply uranium concentrates produced in the United States to the US Department of Energy (DOE) in support of the country’s US$75 million Uranium Reserve established in 2020.
Peninsula’s wholly-owned subsidiary Strata Energy Inc will supply 300,000 pounds of U3O8 currently held in the US to the DOE based on a price above the current spot and term pricing benchmarks, which reflects the scarcity of US-origin materials in the uranium market.
Strata is a qualified supplier and provided an initial offer to the DOE in early August 2022.
Long-term producer
“We are very happy to secure this agreement to supply a portion of the material needed for the US Uranium Reserve,” Peninsula managing director and chief executive officer Wayne Heili said.
“The company produced uranium at its Lance Projects in Wyoming from 2015 through 2019 and is now in the process of completing the final preparations to resume production activities at Lance in 1Q CY2023.
“This transaction with the DOE is highly supportive of our objective to become a long-term reliable uranium producer. We are also pleased to support the DOE’s efforts aimed at revitalising the US nuclear fuel cycle.”
Getting aligned
Peninsula’s decision to restart its 100%-owned Lance Projects is the final step in a project transformation initiative to change from an alkaline ISR operation to a low pH ISR operation.
The objective is to align the operating performance and cost profile of the project with industry leading global uranium production projects.