ASX-listed uranium company Peninsula Energy has secured a $56-million funding package to accelerate mine development, production growth and strategic expansion initiatives at its flagship Lance project, in Wyoming, in the US.

The funding package comprises a fully underwritten institutional placement comprising the issue of about 62.4-million new fully paid ordinary shares in the company at an issue price of A$0.35 each to raise about A$21.8-million, or about $15.7- million; a fully underwritten 1-for-11 accelerated non-renounceable entitlement offer to eligible shareholders at an offer price of A$0.35 per a share to raise up to A$14.2-million, or about $10.2-million, before costs; and a binding commitment for a $30-million convertible note debt facility secured with investment firm Washington H Soul Pattinson & Co (Soul Patts).

“This funding package provides the impetus for Peninsula to move swiftly into the next phase of growth at the Lance project. With ramp-up activities advancing and the acidification of Header House 14 progressing ahead of schedule and encouraging initial head grades, we are focused on laying the foundations for our next step-change in production growth through the development of Mine Unit 5 at Kendrick. It is vital that we lay the foundations for this next step-up in production growth now.

“This funding package will enable Peninsula to get these critical work programmes underpinning production growth rates toward the Horizon 3 levels under way to ensure we can deliver increased flow rates from the wellfield," comments Peninsula MD and CEO George Bauk.

Lance is one of the largest, independent uranium projects in the US and, once back in full production, will establish Peninsula as a fully independent end-to-end producer of yellowcake. Strategically positioned within a supportive US jurisdiction, Peninsula is well-placed to become a key domestic supplier of uranium and play an important role in a clean energy future.

Peninsula says the funds received from the equity raise and the Soul Patts debt facility will be used to continue the ramp-up of production at the Lance project and to start wellfield development activities in support of the company’s Horizon 3 longer-term production targets and to ensure a smooth ramp-up toward full-scale production.

Further, the funding package allows the company to start activities on the planning and development of Mine Unit 5 in the current quarter, which minimises the potential impact of a decline in production in late 2027 as Mine Unit 4 is depleted.

The current timing to start acidification of the first header house in a new mining unit is about 12 months from the start of development, including drilling of monitoring wells and delineation holes that are required to attain the customary approvals from regulators to commence production activities in a new mine unit.

The funds will also be used to fund the initial development of Mine Unit 6, which is expected to start in March 2027.

Meanwhile, the company points out that low pH operations at the Lance project have recently been affected by the build-up of gas in the wellfield, resulting in a reduction in flow rates. The issue has been attributed to the ratio and timing of injection of sulphuric acid and hydrogen peroxide.

"Operational adjustments implemented by the site team have delivered recent improvements in flow rates, providing increased confidence that the technical aspects of low pH leaching chemistry are performing effectively at the Lance project. As we increase our production volumes from the wellfields, the company needs to invest in an additional deep disposal well along with additional evaporation pond capacity.

"This is driven by increased flow rate through the plant and is typical for in-situ recovery projects as wellfield flow rates ramp up," it explains.

The company plans to spend $30-million in development capital expenditure (capex) at Mine Unit 5; $10.8-million in initial mine development capex at Mine Unit 6; $6.5-million on additional deep disposal well capex; $1.5-million on additional pond capex; $7.6-million on other infrastructure, ongoing wellfield and header house development and $4.2-million on repaying outstanding debt. It will use the funds raised, along with existing cash resources, to fund the capex and debt repayment.

Peninsula maintains its production guidance for this year at between 400 000 lb and 500 000 lb of triuranium octoxide (U₃O₈) and between 500 000 lb and 600 000 lb of U₃O₈ for 2027.

Cash operating costs are, however, expected to increase to between $30-millon and $35-million a year for this and next, compared with the previously guided $20-million to $25-million a year. Peninsula attributes this increase to lower production from Mine Unit 3; higher acid use during production from Mining Unit 1; higher acid prices; and higher wellfield maintenance costs, among others.