Says Lance Projects Are Well Placed To Advantage Of US Uranium Needs
Australia’s Peninsula Energy (ASX:PEN) and its wholly owned U.S. subsidiary Strata Energy, have welcomed the news that US President Donald Trump has approved the Omnibus Budget Bill which amongst other priorities funds the establishment of a U.S. National Strategic Uranium Reserve. The approved Budget directs the U.S. Department of Energy to allocate US$75 million toward the establishment of a program to operate a uranium reserve.
The company says it is the only ASX-listed uranium company that has the immediate ability to take advantage of outcomes from the NFWG in the form of US government programmes that support US uranium mines. The Lance Projects are in transition from an alkaline to a low pH in-situ recovery operation, the global leading method of uranium production.
The uranium reserve is being established as a manifestation of this Administration’s stated priority of preserving existing assets of US nuclear infrastructure.
This programme provides a welcome boost for the uranium mining sector, and Washington is expected to build on this programme over the coming years. It comes on the heels of the 20-year extension and amendment of the Russian Suspension Agreement which strengthens the limitations on the importation of Russian uranium.
Peninsula’s Managing Director and Chief Executive Officer, Wayne Heli, said the budget bill also contains language that provides a Congressional backstop to this important trade agreement, establishing long term protections for American Energy Security.
Mr Heli said Peninsula believes that the establishment of this Uranium Reserve will provide a substantial opportunity for its Lance Projects in Wyoming to secure new uranium offtake agreements with the US DOE. Additional sales agreements are a key consideration in the company’s decision-making process regarding the restart of production activities at Lance.
“Creation of a uranium reserve is truly a ground- breaking initiative for our industry and our nation. The reserve programme will go a long way toward supporting and expanding the domestic production of nuclear fuel in 2021 and beyond,” Mr Heli said.
“We look forward to working with the U.S. DOE to ensure this funding strategically supports established production companies with permitted facilities and infrastructure. The budget approval, and other recent bipartisan legislative actions recognise the importance of nuclear energy in the generation of baseload, carbon-free electricity.”
In April 2020, the US Secretary of Energy released recommendations from the U.S. Nuclear Fuel Working Group (NFWG). The NFWG report stated that the U.S. government will take bold action to revive and strengthen the domestic uranium mining industry.
Included within the NFWG recommendations was the direct purchases of uranium and nuclear fuel services to expand five-fold the American Assured Fuel Supply strategic inventory stockpile by purchasing 17 to 19 million pounds over a 10-year period of US produced U3O8 (the Uranium Reserve). The approved 2021 Budget includes funding of US$75 million for the Uranium Reserve.
The initial US Senate proposal for appropriation of Uranium Reserve-backed purchase of US-produced U3O8 was US$150 million. However, during the budget negotiations the Congress Budget adjusted the initial year funding to US$75 million. The approval of the revised amount still signals a significant impetus for the US domestic industry and the start of a longer-term program.
The Uranium Reserve would supplement the company’s existing portfolio of uranium concentrate sale agreements which are with major utilities, totalling up to 5.5 million pounds U3O8 through to 2030, with a weighted average future sales price of US$51-$53 per pound.
“Peninsula is the only ASX-listed uranium company that has the immediate ability to take advantage of outcomes from the NFWG in the form of US government programs that support US uranium mines. The Lance Projects are in transition from an alkaline to a low pH in-situ recovery operation, the global leading method of uranium production.”